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10 Questions to Ask while Buying Insurance

Without an adequate insurance policy, your financial portfolio remains incomplete. It is the basic requirement of a successful financial plan and saying that you should be very careful. As the insurance needs differ from person to person and the policy fulfils the requirements of one may not suit the other you should be extra curious while choosing a plan. Given that, you should consider asking a few questions to yourself before deciding on a plan. Here we go:

What is the Purpose of Buying?

Without knowing the actual purpose of buying, you can never take a fair decision. Everyone buys insurance to protect itself financially during an unforeseen event and to provide financial security to the family. Let’s say, if you are up to buy oriental insurance online, you should ensure the policies offered by the insurer fulfil your purpose of buying insurance from them. Moreover, the tax benefits you can earn are an added security.

Am I Choosing the Right Plan?

With a plenty of insurance providers offering the insurance policies with different features, you may be confused while making the right decision.  It is quite confusing whether you should go for a ULIP plan and invest in the stock market or go for a traditional life insurance with a death cover. Well, whatever plan you buy, make sure it is sufficient and offer as much as cover you actually require.

Does the Premium Suit My Budget?

As you already know insurance is a contract between the insurer and the insurance buyers, you have to be careful and understand each condition thoroughly. As premium is the most important aspect to avail the insurance benefits continuously, you must ensure it is affordable. Check for the premium amount before you zero down on a plan. This will help you realise whether it is feasible or not. So, if you are buying from oriental insurance (as in line with the above example), make sure the offered oriental insurance premium suits your budget.

Who am I Buying the Insurance From?

It is the most important question to be asked. The insurance provider from whom you are buying a plan is equally important. You should know from how long the company is in the business, how are they performing till date, customers’ reviews on the products, awards and recognitions received etc. to aid yourself with an informed buy. Investing in a plan without researching about the insurance provider ever can be a good idea.

Is there any Lock-in Period to be served?

If you are investing in a ULIP plan, in that case, this question should be your to-ask-list. ULIP plans come with a lock-in period which is pre-decided. According to this, the invested amount should be locked for a specific period and can’t be withdrawn. Therefore, you should ask for the lock-in period and invest only if you can sustain without withdrawing the invested money. However, experts say investing in ULIPS, one can earn good returns as compared to traditional insurance policies as the money is invested in the stock market, bonds etc.

What are the Available Premium Payment Options?

To enjoy the policy benefits uninterruptedly, you will need to pay the premiums without a fail. You must ask for various payment options available with the insurer. Usually, various premium payment options available for life insurance policies are - annually, monthly, semi-annually and quarterly. However, premiums for general insurance policies can be paid annually. Some policies also come with long-term renewal options. Persons with a limited regular income source cannot pay the premiums on a monthly basis and for that, they may wish to opt for a policy that doesn’t come with monthly paying option. If the premium paying option is something that bothers you, why not clear your doubts with the insurer regarding this and buy free-minded.

Does the Policy offer Rider Benefits?

Usually, every policy has a basic cover, what matters if it suffices your requirements. Additionally, some insurers come with rider benefits as well which the insured can opt for by paying an extra premium. However, these riders immensely boost the basic insurance coverage and offer optimum protection. Some of these covers include- critical illness cover, personal accident cover, disability cover etc. There is top-up facility as well to increase the sum insured. Make sure you’ve added with these benefits at the time of choosing among the various plans

Does the Policy Come with a Free-look Period?

Buying insurance is a lifetime commitment which you can’t buy randomly. When you always wish to buy the right cover, sometimes you may not satisfy with the policy. In this regard, you don’t need to compromise and cancel the policy if the insurer comes with a free-look period. As per the IRDA guidelines, a free-look period is a time period within which you can cancel a policy if it doesn’t suit your requirements. The insurance provider returns the all paid premiums. So, if you are not confident enough that the policy you bought is the right one, you can opt out the same within the provided free-look period.

Am I Taking Unnecessary Covers?

It is one of the most important questions to ask. Sometimes people buy insurance coverage that is actually not required by him/her. By cutting down on the unnecessary covers, can save a huge amount on premium. It’s true that riders are the basic cover booster that comes with a cost. That’s why you should be careful at the time of choosing the policy coverage.

Does the Company have a Sound Claim Settlement Ratio?

Last but not least- don’t forget to ask this question. Claim Settlement Ratio is what decides the capability of an insurance provider to pay the claims out of the total registered claims. This indicates if the company is reliable or not. There is no use of investing in a company that can’t fulfil your insurance needs.

In a Nutshell!

Bear in mind there is no dearth of insurance providers in the market who offer a lot of insurance products with different features. While choosing one you should consider your requirement first. Also, don’t ignore the policy final print which comes with certain clauses that need your attention. Without carefully understand a product you should not come to a conclusion. In this regard, the aforementioned questions will help you make a fair decision.