Insurance policy is an important financial investment, which ensures the safety of you and your family. But, choosing the right policy and taking it at the right time is equally important. Let us know what things should be kept in mind while making a policy.
1. Need and Objective
Don’t take the advice of others alone to decide. Ask yourself, Why do you need insurance? Who is going to gain from it? How much protection do you need? Answering these questions will help you figure out what you want to do and which programme will work best for you.
2. Right Coverage
Think about your money situation and financial planning. What kind of money can your family lose if something happens to you? Plan your budget so that the price you pay each month fits your monthly income and also adjust with your financial investments like mutual funds, stock markets, and precious items. Be careful not to agree to an expensive policy that will put a strain on your funds.
3. Focus on Value, Not Agent Commission
As I said, you have to calculate how much you can invest from your monthly salary. You should pay a fee that is based on the rewards of the insurance, not the agent’s profit. Look for plans that cover a lot of things and don’t cost too much. Your monthly premium or savings for policy should be as such you get the maximum returns.
4. Thoroughly check the Company’s Reputation
Don’t just look at brand names. Check out the company’s customer happiness scores and claim payout ratio, which is the number of claims that were paid. It is best to choose a company that has a history of quickly paying claims.
5. Select the Right Policy Term
It is very important that the policy term fits your goals. Are you planning for retirement or the future of your family? Pick a term that fits your wants in the long run. Changing rules after the fact can be difficult and cost money. There are two things to learn in this. There is a payment period and a policy period. You decide the payment period for how much time you want to invest and the policy period means you stay invested for the period of time. Payment period may be 10-15 years and policy period may be 20-25 years with lock-in period of 10-15 years after the completion of payment period. So, learn and research well and then, decide.
6. Understand the Claims Process
While getting information about the company, read the information about how soon one’s claim can be received. What are the methods to file a claim, if you want to take your claim? Learn about your rights and how to settle your claim. How long does it take to handle claims? What kinds of papers do you need? Don’t depend on your agent alone. Learn how to file a claim so that you don’t have to deal with problems in the future. Because your agent may or may not be with you for a period of 20-25 years, but you should be aware of the claims of your policy so that you do not have any problem. And you should have a dispute resolution process if a problem arises.
7. Policy Review
Don’t trust your agent without any doubt. Pay close attention to the policy papers. Know the rules, like the release value (the amount of money you get back if you quit) and the free-look period (the time you have to look over the policy and decide to cancel it). Do not be afraid to ask questions or get more information.
Read and understand the policy documents carefully, and consult a financial advisor if necessary.
Read this – How Much Term Insurance you need and Why?
Conclusion
Do a lot of study on the coverage you want to buy and make sure it fits your financial needs and goals. You might want to talk to a financial adviser for more personalized advice.
By adding these ideas, the book becomes more interesting and gives readers the tools they need to choose an insurance policy with confidence.
