Whether your family consists of only you and your spouse, or even a house full of kids, one of the most important things you should do for peace of mind is take adequate insurance. Since there are so many options available in the market, it would be easy to put off picking a suitable plan. This could be due to the fact that you are overwhelmed by the choices available, or simply because you do not understand the coverage. The suggestions in this article will help you narrow down on a suitable insurance product for your specific needs.
How to select the right life insurance plan
Having adequate life insurance cannot, obviously, bring back the loved ones. However, it can assure financial security to the surviving members of the family. The first step in buying the most suitable life insurance plan is understanding the options available in the market today.
Life insurance products can be broadly classified into the following types:
1. Savings plans – These insurance policies provide the life assured protection and savings through guaranteed wealth growth. These plans could also involve investments in the market, offering potentially higher returns. Endowment plans, money-back plans, and Unit Linked Insurance Plans (ULIPs) fall under this category.
2. Retirement plans – Retirement plans help you to accrue a corpus for your sunset years.
3. Child plans – An insurance product that offers you savings and payouts at regular intervals for meeting the aspirations of your child is referred to as a child plan.
4. Protection plans – Term insurance is an example of a pure protection plan. This helps in financially safeguarding the family of the life assured after his/her death.
You need to assess your insurance needs and identify the type of plan you will be buying. You also need to keep in mind your budget when deciding on a policy. For instance, if you decide to buy a term plan, you will be required to pay a very small amount as premium for extensive coverage. If you choose an endowment plan, you will see that the premiums are higher because of the savings component involved.
Another point to note is the availability of the policy comparison facility at neutral financial websites. This can ease your hunt for the perfect insurance plan; so do not miss out on comparing plans between insurers. The icing on the cake is the fact that policy comparison is offered free of extra charges!
You should also stay away from insurance agents or organisations that are unable to explain the amount of coverage you will be offered. Since there is a lot of fraud involved in traditional policy sales, it is best to stick to the online route of policy purchase. Buying insurance online is safe, as it follows global security standards, and the policy is issued in the least possible time. Another benefit is the fact that online insurance purchase is free from the hassles of paperwork.
When deciding on an insurer, make sure that you check the claim settlement ratio of the company as it is an indication of its reliability and performance.
Buying suitable health insurance
Medical insurance is one of the best ways in which you can combat the rising cost of healthcare and hospitalisation. Health insurance companies offer plans that cover both individual customers and families. With the advent of online insurance sales, a host of plans provided by health insurance companies are easily available at your fingertips for assessment and purchase.
This actually makes it very difficult to narrow down on the most suitable policy. Unless you are adept at understanding the clauses in a policy document, you will have a tough time selecting a plan. Listed below are some pointers that will help you along the way:
● Understand your needs – Identify the number of people you will be insuring, the common medical problems in your family, and the special risks you bear. You can decide how much cover you need based on this analysis.
● Sum insured – This is the coverage offered by your medical insurance policy. In other words, you will receive reimbursement for expenses on medical treatment up to the sum insured stated in the policy. It is advisable to opt for a high sum insured, as you can avail coverage for more medical emergencies this way. However, you should be careful not to over-insure yourself. Select the most cost-effective policy to save on health insurance expenditure.
● Illnesses covered – Ensure that your health insurance plan covers a vast number of illnesses, specifically critical illnesses.
● Cashless claim facility – When choosing an insurance company, ensure that you select one that has a wide network of cashless hospitals where you can avail treatment.
● Health insurance tenure – You should understand the tenure of the health insurance plans you have shortlisted. Pick a plan that is convenient to renew as well.
● Incurred Claim Ratio – The incurred claim ratio is a good indicator of a health insurance company’s ability to honour claims. So, select an insurer with a robust ratio.
How to choose the best motor insurance plan
Motor insurance plans are of two types – third-party liability insurance and comprehensive insurance. When looking to buy a suitable car insurance policy, you should first decide on the extent of coverage you require. It is recommended that you buy comprehensive coverage, as it protects you from all adverse eventualities. However, if you have a tight budget and are looking to insure a vehicle that you do not use too often, you can settle for a third-party liability standalone plan as well.
You should also check the financial standing and reputation of the motor insurance provider you choose. It is advisable to compare plans between insurers at neutral financial websites, as you can arrive at the most cost-effective solution this way.
Car insurance companies offer various types of discounts to customers, some of which are highlighted below:
● Automobile association membership discount
● Loyalty discount
● No Claim Bonus for good drivers
● Discount for security features in the car
● Discounts based on occupation of the owner/driver
You should check if you are eligible for any of these discounts; this is a great way to save on premium.
The points mentioned above are applicable to two-wheeler insurance as well. After buying insurance for a two-wheeler, ensure that you periodically evaluate your insurance coverage and update the policy as needed. Also, remember to renew your policy on time.
In case you are not able to make up your mind on a motor insurance plan, you can always take the help of a registered agent or an insurance broker. You should also read through your insurance policy thoroughly so that you can avoid unpleasant surprises at the time of the claim.
(This post has been contributed by Bankbazaar.com)
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