The world of insurance can be quite daunting for most people. The complex jargon and confusing terms that are often characteristic of an insurance policy can serve as a deterrent for people to avoid buying it, even if they are in need of it. The good news is, that insurance is not as complicated as it may appear or sound. Be it life insurance, health insurance or even motor insurance, the entire process, starting from finding the right plan to purchasing it, has become a lot easier than ever before.
For those who are looking to buy an insurance policy for the first time, the whole process can seem rather challenging, not to mention, confusing. But, fear not! To help you start off on your way, we bring you some handy tips on how you can navigate your way through and find yourself the right policy.
Life Insurance
With the sheer number of life insurance companies in India, there are over a hundred plans that one can choose from, to get life cover. However, there are a lot of questions which will need to be answered before you proceed to select a plan. What is the type of policy that you need? How to find out the amount of coverage you need? Which is the best plan available? Which insurers must be avoided during your search? Here are some important tips to remember when you are buying life insurance for the first time.
Understand your needs – Before you start looking for an insurance plan, you must be clear on the reason that you are buying it for. Many people buy life insurance as means to save tax, or for investment. However, the true purpose of life insurance is to provide protection to your loved ones.
Assess your premium payment capacity – Evaluate your financial position to ascertain your premium payment capacity. From your collective income, find out how much you can comfortably allocate towards policy premiums without cutting costs on other necessities.
Find out your options – There are multiple types of life insurance policies available in the market, each designed to fulfil different requirements. Read up or talk to an expert to find out what each type of policy has to offer in terms of benefits and protection.
Get multiple quotes – After you have decided on the type of plan that is fit for you, get quotes from different insurers for the same plan. Different insurers will have different rates for the same plan. Find out the plan that offers you the best premium to benefit ratio.
Health Insurance
Health insurance is another type of insurance that has become a necessity now. With rising costs of healthcare, getting adequate medical attention can be quite stressful on one’s finances. For those looking to purchase health insurance policies for the first time, here are a few tips to keep in mind.
You do need health insurance – Medical care costs have risen exorbitantly over the past few years, making quality health care inaccessible for millions of people. Health insurance is a necessity now, more than ever.
Familiarize yourself with the basics – To fully understand how a health insurance policy works, it is important that you familiarize yourself with the keywords related to such policies. Some examples include terms like premium, deductible, co-payment etc.
Work-out your budget – Health insurance premiums will be an added expense in your budget. Considering this, it is important that you figure out how much you can spare towards policy premiums and get a plan that takes care of your needs.
Understand riders – Riders are add-on covers that you can purchase over your base health plan. However, not all covers are fit for everyone. Be selective and choose an add-on if you really need it. Rider premium is additional to the base plan premium.
Family floater or individual cover – Another question you have to answer before purchasing a plan is whether your requirement calls for a family floater plan or an individual plan. While family floater plans are usually the best option, if you do have a ‘high risk’ family member who requires constant medical attention, then an individual plan may be a wiser option.
Car Insurance
According to the Motor Vehicles Act, 1988, all vehicles must compulsorily be covered under at least a third party liability policy before they can be driven on public roads. This law in itself makes it difficult for one to simply forget about getting a new car insurance policy for their vehicle. Car insurance policies are fairly simple to comprehend, making it easy for a layman to navigate through the terms and conditions. However, here are some valuable tips help first time vehicle insurance buyers to choose the right plan.
Do your research – Like it is for any other type of insurance, it is important that you carry out thorough research about the types of car insurance plans that are available in the market. Find out the benefits and conditions offered by each plan to make an informed decision.
Compare quotes – an important part of the buying process is to get insurance quotes from multiple auto insurance providers so you can decide which provider is offering you the maximum benefits at a reasonable cost.
Find out the insurer’s claim settlement ratio – Claim settlement is an important part of the insurance process. Before you choose an insurer, check out their claim settlement ratio which basically indicates the intention of the insurer regarding claims. The higher the insurer’s claim settlement ratio, the higher the chances of your claim getting honoured.
Be aware of the coverage details – To avoid being caught unaware at the time of claim settlement, make sure you go through the details of your motor insurance policy, including the inclusions, exclusions, premium details, terms, and conditions.
The sole purpose of an insurance policy, be it life, medical, or motor, is to protect you and your loved ones from the financial consequences brought about by an unfortunate event. Be it sudden death, an accident, or diagnosis of a life threatening illness, the right type of insurance is nothing short of a blessing during difficult times, select the best one here . With these handy tips, you can confidently take the first steps towards purchasing a policy that is fit for your needs.
This article has been produced by TNM Marquee in association with BankBazaar.