Mistakes to Avoid When Buying Insurance Policies

It can be baffling to choose the best insurance policy as they are quite difficult to comprehend at a first glance. With the availability of a plethora of Insurance Companies in India, it is really important for the buyer to know what really differentiates one from another.

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    So, once you are aware that why do you need an insurance policy, you can decide which insurance company and what type of insurance plan you need to purchase. But it can be difficult to choose the adequate one. Keeping your best interests in mind, we have put together certain mistakes, if avoided would help you make the right choice

    Not Checking Claim Settlement Ratio

    It is one of the most important parameters that people tend to miss when buying an insurance policy. You can check the IRDAI’s Annual Report to check the Claims Settlement Ratio of all the General insurance companies in India. Most of the insurer’s also mention it on their website. The claim settlement ratio is based on the number of claims settled. And it should be maintained over the years. If an insurer has iAAA rating for its claim paying ability, you can definitely go for that one.

    Not Comparing Different Quotations

    Comparing different insurance plans and their features is the key to find the right insurance plan with adequate coverage. You can start by deciding three to four general insurance companies India after making an online comparison, click on the insurance plans and ask for a quotation. Fill the application form with accurate information to get an exact analysis. After submitting the form you will receive free quotations from the selected insurance companies.

    Not Following the Right Approach

    So the right approach is to select the insurance company after comparing different plans. Once you have received different general insurance quotations, compare all of them and choose the one that caters to most of your needs and preferences in terms of the policy period, budget, premium, and coverage.

    Not Evaluating the Amount of Insurance

    Have a fair estimate of the amount of your general insurance policy, and then search online for different general insurance companies. Go through their plans, benefits, and limitations. You can also search for general insurance policies online as well.

    Not Checking the Policy Features

    It is one of the most important deciding factors in selecting the right general insurance policy. So if you are planning to buy a health insurance or a car insurance policy or a travel insurance plan then you need to decide whether you want to buy a basic plan, or a comprehensive plan or a thirdparty liabilityonly policy in case of vehicle insurance. Once you decide you can compare the policy features, inclusions and compare them with different plans and buy the one that meets most of your needs and requirements.

    Comparing Premium

    If you want to buy insurance just to avail the coverage benefits or for tax saving, the amount of premium is anyway a crucial deciding factor. For example – the premium amount for liability only insurance plans is lower in comparison to a comprehensive plan because of the benefits that are provided. However, you can choose an insurance company that offers the best premium rates (according to your pocket) for these plans.
    It is important for you to know because if you are not able to pay the premium on time, your policy can lapse. But if you are more concerned about the coverage provided and can pay off the premium then you can give it a skip. 

    *Tax benefit is subject to changes in tax laws

    Missing out on Rider Benefits

    Check if the insurer offers the rider options specific to your insurance plans critical illness health insurance rider, zero depreciation in car insurance to name a few. Different insurance companies offer different rider benefits. You can finalize the one that offers maximum benefits. Make sure to buy rider as your needs and requirements. Buying riders would mean chipping in more premium than a basic insurance policy. 

    Overlooking the Sublimits/Deductibles

    Not all of us may not be aware of the sublimits that are applicable to some of the coverage benefits. Especially, in case of health insurance when you have to pay the medical bills in excess of the sublimits causing a financial strain due to sheer ignorance at the time of policy purchase. To avoid such an awkward situation you need to be careful about this particular clause before making the payment

    The solution is to find out what all features have sublimits or deductibles associated with them. Some of the most common ones are roadside assistance in car insurance, dental treatment in travel insurance and room rent sublimits in medical insurance. This deductible has an effect on the total admissible claim amount. So, make sure that you check the percentage of deductibles or sublimits before buying a general insurance plan. However, if possible, try and get a plan that comes without any sublimits

    Not Checking the Discounts Offered

    If you are buying a general insurance policy online, you can always check for discounts that insurers offer on the online purchase.

    Ignoring the Claim Process

    Merely, buying an insurance policy won’t suffice. The most important thing that you need to consider is the claim procedure. It is recommended to select a general insurance company that has the minimum turnaround time. You can always go through the customer reviews and see for yourself how quickly they have settled the claim.

    Once you have selected the general insurance company you can make the purchase online from our site. However, the procedure may vary from one insurer to another. Some general insurance companies may require extra documents or would need you to undergo premedical tests before signing off.  Whereas, some companies will also send you documents at home, which you need to sign and submit to the insurance company as per their rules and regulations.

    It is so convenient to purchase an insurance policy online. It is easy to search, make a comparison, get quotations and then after analyzing, choose the best insurance policy.

    Over to You!

    However, certain decisions like choosing one insurance company among so many options can actually get a little complex. So, to ensure your peace of mind and to secure your family’s future, it is imperative to buy the right policy from the right insurance company at the right time.

    Written By: PolicyBazaar - Updated: 02 August 2021

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