Tips to get the right insurance cover

Published: May 23, 2018

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We are blessed to live in an era where we can insure anything from a mobile phone, a motor vehicle to one’s life too. Mobile phone and motor insurance policies can protect you from theft and any damages made to the mobile phone/vehicle. Life insurance, on the other hand, serves as a replacement for the policyholder’s income to his/her family. The benefits of buying insurance policies are many. First-time insurance buyers may be apprehensive about the total insurance cover he/she will require. These 6 tips will come in handy to such first-time buyers who wish to get the right insurance cover.

Understand your needs

First and foremost, one has to assess his/her needs. Let’s say a person wishes to get a life cover for himself/herself. Life insurance is designed to provide financial comfort to the policyholder’s family after his/her demise. So it is important to understand the total income of the family, the expenses incurred on a regular basis, and the total amount that will be needed by the family to recoup from the loss of an earning member of the family. The policyholder, if looking for a simple and cheap protection plan, can go in for a term insurance plan that will provide coverage for a certain period by paying a nominal premium amount.

Estimate the costs involved
One should look into the finest details of all costs involved. It could be anything from application charges, administration fees, fund management charges, premium amount, riders, etc. The Insurance Regulatory and Development Authority of India (IRDAI) has made such charges nominal to make insurance policies cost-effective. One should compare insurance policies and insurance companies online to choose the best insurance plan. Individuals who wish to, say, buy a car insurance policy can look up the internet to find the best car insurance policy to rule out any confusions or extra costs incurred on buying policies offline.

Keep a track on the riders

Before buying a policy, one should look at the additional covers or riders available with the policy. Riders provide extra cover for events that are unexpected such as accidents or extra cover for accessories. ‘Cover for Accessories’ and ‘Zero Depreciation Cover’ are some riders available for a two-wheeler insurance policy. Every policyholder should go through every word of the policy no matter how time-consuming it could get. It is important to do so to avoid conflicts with the insurance company during claim settlement. Also, the exclusions mentioned in the policy should by no means be ignored.

Don’t get unnecessarily large covers

Individuals may purchase multiple life insurance policies in order to reap tax benefits under Section 80C of the Income Tax Act. Managing so many policies together could become difficult for policyholders and one might forget the premium due dates. Failure to pay the premium might result in late payment charges or in case of failure to pay premiums for a long period of time, the policy might lapse. Hence it is advisable to buy one best life insurance policy that provides optimum financial security to your family, which happens to be the primary purpose of a life insurance plan.

Revisit your needs time to time
An individual’s needs change from time to time. Hence, it is wise to make enhancements or additions to the policies regularly. While insurers make restrictions in terms of additions that can be made after the purchase of the policy, enhancements can be made if the policyholder feels the need to do so. If an individual realises that his/her health expenses are increasing with age and feels the need for a larger cover, he/she can make top-ups to the existing health insurance plan.

Ask for help
An insurance agreement will constitute a number of clauses that may not be in the comprehending capacity of a common man. So he/she should seek advice whenever needed so that there are no challenges when he/she has to renew a policy, withdraw a policy, make a claim, etc. Financial advisors and insurance agents can resolve any queries that a prospective policyholder might have. Additionally, individuals can read up and compare insurance plans online on third-party websites. You can also find a list of Insurance policies in bankbazaar.com  

While buying an insurance policy, one should also consider his/her income and any possible inflation that might occur in the near future. This will help a first-time buyer to ascertain which plan type or cover he/she needs.

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