Insurance as they say is the protection (to a some extent)
from a risk which may arise due to happening of an uncertain event. Insurance is definitely necessary as it not
only protects us but also gives us an option for investments. But what points
should we take care of while buying insurance?
1.
The sum
assured must be reasonable – the sum assured must be a reasonable amount
and not a very high amount as you are the one who has to pay the premium and if
you go for unjustified sum assured then you will be paying unreasonable premium
amount every quarter, or half yearly or yearly. The sum assured should also not
be very less as you should consider the value of money, inflation and various
other factors while deciding on sum assured.
For e.g if your monthly salary is Rs. 10000
and you buy an insurance in which your quarterly payment of premium is Rs.
18000, then it means you are paying Rs. 6000 every month for premium which leaves
you with just Rs. 4000 for monthly expenses which is a less amount, on the
other hand you buy an insurance policy for the period of 10 years and the sum
assured is just Rs. 100000 then you can imagine what is the use of this policy
as after 10 years Rs. 100000 will of be very little use.
2.
Who is
your insurance provider? This is a very important question as you should be
parking your money with a company who is reliable, has a proven track record, and
handles claims quickly and smoothly. In case, of Life insurance particularly,
you should choose your insurance provider very carefully as if you die and then
your family has to face troubles in getting the claim than what is the use of
this insurance. You are buying life
insurance for your family and if they cant get the benefit than it is useless. So
make sure that your insurance provider has a good track record.
3.
Who is
your insurance agent? You should be very careful while choosing your
insurance agent. There are two types of insurance agent - freelancer and Employed. The freelancer
agents do have targets to fulfill but they are more concerned about their
reputation and relation with the consumer and their name is their business. On the
other hand, the employed insurance agents are employed with an insurance firm
and paid fixed salary and incentives if they reach their targets. In comparison
to freelancers the employed insurance agents are under more pressure to fulfill
their targets and they can be sometimes pushy while dealing with the clients. So
I always prefer a freelancer rather than employed insurance agent.
4.
Read the
document properly – nobody needs to tell you this and you should be knowing
it that you should read each and every document carefully before signing it and
don’t just rely on the verbal talks with your insurance agent.
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