Are You Only Comparing Policy Premiums?
Price plays an important role in buying what you need – but how about quality? Value adds, such as durability and transparent clauses come at a price that’s worth it. It is important to consider all these factors before you buy an insurance policy. So get rid of comparing just premiumsfor buying your next policy. Cheaper premiums are only a tip of the iceberg. There is more to an insurance policy that lies within and you will only know about it if you truly intend to. Don’t forget to ask right questions to your insurance agent if they are selling you a policy based on cheaper premium than their rivals.Listen to them carefully and if they are only talking about premiums and nothing else, bewatchful.
Don’t rely on cheaper premium amounts flashing out loud. Offering low premium is the easiest way to lure the customer. Or rather we should say, ‘uninformed customer’. Unlike anything else in the world that has two sides – every insurance policy has three sides – the good, the bad and the premium.
Buying an insurance policy is a long term experience. What if your cheaper-premium insurance policy makes you stand ineligible to reclaim your losses in entirety? Unfortunately, there is no comeback from there.
Some important factors that require due consideration include:
- History of the insurance company and the claim settlement ratio. A claim ratio of 80% and above is generally considered a good claim ratio. It is also important to understand the capabilities of insurance provider in terms of company disclosures, customer service capabilities, channels, among other things
- Policy features and coverage vis-à-vis your requirements.One important factor to look at is exclusions in your insurance policy. Figure them out cautiously. They vary from policy to policy. More the premium, lesser the exclusions, usually.
- Policy options such as ability to add riders (add-on to your primary policy to cover situations over and above what your primary policy offers, example critical illness rider, disability cover, etc.), or enhance insurance cover during the policy term are important to ensure comprehensive policy coverage and must be evaluated.
- Policy-type considerations such as fund performance in case you are purchasing a ULIP, hospital network, types of illness, etc. in case of health insurance also require due attention, and must not be ignored
So start like this.
- Find out top 5 most reputed companies offering insurance that you need.
- Begin with evaluating your risks and how you want them to be covered.
- Now assess each of those insurance providers on the basis of your requirement. Compare them carefully.
- Ask right questions to company representatives and seek their answers in written or through email.
- Finally, now you can relax and compare their premiums.
Then there are high chances your insurance policy will be of better use this time.