Let’s Face It, Policy Evaluation is Important!
We often heard “prevention is better than the cure” and it stands true many a times. When there are a hell lot of options available for everything, why insurance should be left out? Why not take some time form your busy schedule to review the existing insurance cover you have and stay well-assured.
To ensure if you are having the right plan or not, you need to evaluate it on frequent intervals. The possibility that you may come across something better or stay confident about the existing one. Let’s try it-
Importance of Buying Insurance Policy
Insurance policies, be it health, motor, car or life insurance come with certain perks:
- It helps mitigate the extra financial burden that may arise out of an emergency hospitalisation
- Can ensure quality healthcare while hospitalised
- Financial future of the family is secured in the sudden demise of the breadwinner of the family
- Enjoy tax benefits
- Liability towards third-party are well-covered
What is the Perfect time to Review a Policy?
The ideal time to review your existing health/car or life insurance policy is:
When you are actually not satisfied with the insurer. The reason can be many. You might not happy with the service or the last claim process with the insurer was pathetic that forced you to think over it. This can be one of the main reasons to review the policy or switch to other options.
A change in your professional life may force you to analyse the insurance cover you have. With a hike in salary or a better promotion also aids in higher living standard, which on the other hand, compels you to go for a higher coverage with lucrative features.
It is indeed the perfect time to review the policy when you are ready to welcome a new member. The parenthood comes with lots of happiness and responsibility. When the expenses of parental care can be exorbitant, it would be easy if these can be taken care off with proper planning. Moreover, not every insurance policy comes with in-built maternity benefit. So, family planning is on the cards, you should opt for another plan that covers pregnancy as well.
You should consider reviewing a plan when your retirement is doorstep. Retirement days are the most sensitive phase, which should be protected financially. Health-related complications are at the higher side in this phase, which may require frequent medical visits. By considering the insurance coverage at the time of renewal, you can opt for a plan with better coverage that suffices the requirement of retirement days.
Perks of Evaluating Insurance Policy every Interval
By reviewing insurance policy, you can ensure much more benefits than you expected from your policy.
Let’s say, some insurers may not cover you for lifestyle diseases such as Diabetes, while some other do. Likewise, some insurers don’t come with personal accident cover with the basic two wheeler insurance, while others do. If you review the policy as per your requirement, you can financially cover yourself for the contingency that may arise out of these.
In the race of being counted in the list of splendid insurers, the insurance providers have come with more attractive features and additional perks. Annual health check-ups, in built-restoration of the sum insured, roadside assistance in case of vehicle breakdown etc. are a few to name. A free annual health check-up is definitely a bonus when a single visit can cost you a bomb if you approach a reputed physician. Given that, you can come to a decision only if you review your insurance coverage on a frequent basis.
Sufficient Coverage with an Affordable Premium
More or less premium is always a concern for us. The possibility that you are charging a bomb for limited coverage under your current policy with no additional benefit. By evaluating the policy, you may find a better policy with attractive coverage at the same cost.
Consequences of Not Evaluating a Policy
You will miss out on a few things if you don’t consider reviewing your existing policy. Here we go:
- Pre-existing Illness: Not evaluating your existing health policy could impact your pre-existing Illness. Let’s say the waiting period for cataract imposed by your insurer is 2 years. A thorough review of policy you might come across insurers who offer a pan with a lower waiting period for the same.
- No Claim Bonus: The percentage of bonus offered under No Claim Bonus is quite lucrative where you can either increase the sum insured on the premiums for the subsequent years. Usually, the percentage of bonus ranges from 20% to a maximum of 100%. However, some insurers come with a higher than that. Chances are that you missed out such an opportunity or paying a higher premium for a limited NCB, if not review the policy regularly.
- Coverage and Policy Premium: The ever-changing competitive market forces the insurers to revise their products at a regular interval. Sometimes the new products outweigh the older one and provide the insured with wider coverage. A frequent review of your policy will allow you to keep a constant eye on these changes. When you don’t evaluate the policy, you will surely miss out something really important.
Grounds of Evaluating a Policy
If you don’t evaluate a plan without proper grounds, the evaluation is meaningless. The various grounds of reviewing a plan that you can consider are:
- Coverage of the Policy: The purpose of buying an insurance policy is to offer optimum coverage during an unfortunate event. It is imperative to check the offered coverage under a policy and ensure it is sufficient for you. If it is a life insurance policy, make sure your family is well-secured with the sufficient financial support in your sudden demise. Select a policy that offers healthy sum insured or riders to boost the basic cover. These riders help you ensure extra protection at a minimal extra premium. However, you should compare the various add-on benefits before zeroing down on a plan. Evaluating a policy helps you consider these points and find aright plan that fulfils your insurance needs.
- Premium of the Policy: It doesn’t make any sense to invest in an expensive policy that too for a limited coverage. It is only okay if you can afford it or absolutely need it. However, selecting a cheap policy doesn’t mean that you save money, especially when you have to compromise on the coverage. That is why you should review the premium and coverage at the same time and decide. There is no use of buying a plan with mammoth premiums but offers less coverage.
- Claim Settlement Ratio of the Insurer: If you want to know the financial reputation of the insurer, just check for the claim settlement record. You can check the data offered by the Insurance Regulatory and Development Authority of India online. Claim settlement ratio indicates the ability of an insurer to pay for the registered claims. Higher the ratio better is the company. Mostly, companies try to settle the claims within a stipulated time frame. However, in order to avoid fraud cases, the insurer may require to investigate a claim further, which may take a little more time. However, as IRDA notifies, a claim doesn’t require any investigation if settles within 30 days. So, make sure the insurer has a good settlement ratio and that only can be assured when you review it.
- Convenient of Buying: Buying an insurance policy is easy with several modes of purchasing including through an agent, visit the nearest branch or online. Though buying through an agent is quite famous until the insurers have introduced their services and products online. Even the financial experts support online purchasing. It allows you to grab more idea about a policy and aids you with the detail information. Moreover, online insurance helps you purchase a plan within a few clicks where the insurance seeker is able to pay the payment online as well. It saves time and money as well. This ease of buying is what you should consider at the time of reviewing your existing policy or insurer.
- Customer Support: Customers are always said to be king, if it’s true then they should be offered with the best services as fit for a king. Customer service is what makes an insurance provider stand out of the crowd. When it comes to customer support, the private companies are quite different from the others as they promise better and prompt services. But, the promises should not be on the paper only. The smart consumers of these days want a website full of information, up-to-date online facilities and 24x7 customer support team to help. These requirements decide how good an insurance provider or whether you should opt for a plan from them or not. by reviewing the customer care services of a particular insurance company you can come to a decision easily.
It’s Your Turn Now!
To conclude, policy evaluation aids to change the overall perception of purchasing a plan. You not only can acquire additional information but also come to know that what is offered by other insurers. Thus, it provides you with a win-win situation where you can either opt for a plan with better coverage or stick to the existing one with the sufficient coverage. Well, the final call is yours!
Written By: PolicyBazaar - Updated: 25 August 2020