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How to Evaluate your Insurance Policy

It is in our nature to compare prices and brands even if it is the smallest things we buy. But when it comes to evaluating and comparing insurance policies we take a backseat and let out agents decide for us. 

We view insurance policies and companies in one light, while in fact they are quite different from each other. Different insurance policies offer different benefits and features that may or may not be applicable to all. 

There are several parameters that insurance companies follow, some of them may be applicable to your requirement, for e.g. sum assured, benefits on reaching term, tenure, premium payable, riders, etc. Each one is different and hence evaluating your requirement first, before buying a suitable insurance policy is essential. 

Here are a few tips on how to evaluate and compare insurance companies in India and their insurance policy. These tips will help you zero down on the one that is most suited to your requirement. 

Coverage - This is probably the most common buzz word you hear each time someone mentions life insurance. This feature is important and you first need to check how much coverage you and your family will receive from a particular life insurance policy. Always go for insurance policies that have a healthy sum assured as well as the availability of riders that you can be added to your basic policy plan. Some recommended riders are critical illness and disability, accidental death benefit rider, term rider, waiver of premium rider, etc. There is an extra nominal sum you need to pay in addition to your premium for these riders. Click here to calculate premium now 

Cost of the policy - Obviously investing in the most expensive policy where the premium payment is a mammoth sum does not make sense unless you can manage the huge payout and if it is absolutely required. On the contrary choosing the cheapest policy does not mean that you’ve saved on money, especially if there are a lot of compromises in terms of sum assured and other benefits. Choose a policy that is not only cost effective but suits your purpose of buying one. 

Claim Settlement Record - Want to know how good an insurance company is? Check their claim settlement record, the information is available online and is published by The Insurance Regulatory and Development Authority of India (IRDAI). The IRDAI also states that a claim does not require any sort of investigation if the settlement is done within 30 days of claim submission along with the required documents. Insurance companies today have become doubly secure since there have been recored instances of fraud. Maximum number of claims settled by an insurance company is an indicator that the company is efficient in it’s processing. It also suggests that there should be minimal or no problems when it comes to settling your insurance claim. 

Convenient purchase - There are several modes that you can use to buy an insurance policy, e.g., through an agent or online. Although buying through an agent has been the only mode of purchase until recently, it is not recommend by experts. Buying insurance online is hassle free and saves on time as well as money. The convenience of purchasing policies online from an insurance company makes a whole lot of difference. It adds value buy allowing you to learn about the policy, compare policies as well as make payments and submit documents online. This ease of purchasing is what buyers need to evaluate before buying policies from any insurance company. 

Customer Service - If customer is the king, they should get services that is fit for a king. Customer services is what sets an insurance company apart from those that provide bad service or no service at all. When it comes to customer service, private companies are much different from what erstwhile companies offer. Buyers today look for a website that is resourceful, has complete information on their product, a helpline that can be reached 24/7, good email support and a relationship manager who is reachable and resourceful. These are certain requirements that determine how good an insurance company’s customer service department is. 

Credentials of the insurance company - The financial situation of the insurance company is of utmost importance. This determines if the insurance company is capable of paying the insurance claim amount or no. Checking the insurance company before purchasing their insurance polices is a fundamental requirement. One of the jobs of the IRDAI is to ensure that every insurance company is adequately funded. As a buyer it is your responsibility to check the company’s ratings. These ratings are available online if required, agencies like CRISIL and ICRA are responsible for rating insurance companies. Ratings are often done on the basis of the companies financials, claim settlement ration and a few other factors that the rating agency deems suitable for this process.  

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