What Should I know when taking Up Insurance Cover?


Planning to acquire a life insurance plan? This could be the best decisions you could ever make for your loved ones and yourself. This is because a life insurance cover will help protect the future against unknown emergencies. It might appear overwhelming at the start and many are afraid of making mistakes. There are however some mistakes which people commonly make when they decide to purchase an insurance policy.

  • Chances are that you already have a bank loan and most probably, they will attempt to do cross selling to you their other services and products. While this may seem sensible as you will be handling it together with other financial matters, it is most likely that you may not be getting the best deal when it comes to insurance policy from a bank. Others could probably offer you a far much better deal.
  • One of the biggest mistakes you can do when buying insurance is not checking around. It is now very easy to compare different packages from different providers and then get a feeling of who offers the best deal.
  • Because insurance premiums cost money, it is very tempting to go for the cheapest one. If you have lots of money, it also easy to go for the most costly because you can afford it while thinking it offers you more comprehensive cover. You could be wrong in both ways. Being under-insured, buying a cheap policy puts you and your loved ones at risk as your basic needs may not be met during an emergency. Being over-insured on the other hand could be money wasting. Therefore, it is good to find your middle ground.
  • Delaying to obtain coverage leaves you, loved ones and your assets vulnerable. Premiums also rise as we grow older. In case health declines, one may end up paying more. To delay or procrastinate is risky.
  • The net is full of forms and calculators online which will quickly and at the click of a button give you quick insurance quotes. Use these only as guidelines to feel the market. Your situation is specific; age, health, needs, medical history and budget are unique. Only licensed insurance agents can really provide you objective and accurate rates according to your unique requirements and circumstances.
  • A common error is to purchase policies that are of unsuitable amounts and term length. Know well in advance how long you need to be covered and by how much. Licensed agents can pinpoint you in the right direction.
  • It is important not to purchase insurance which are not underwritten medically. Without having conducted a medical exam, provider will generally spread the mortality risk evenly at average costs because it will not be able to determine who is healthier or not. Consequently, those at a higher mortality level or risk end up paying the same rates as healthier people. Medically underwritten policies will more often save you some money because it enables the company to do proper rating according to health classes and charge you accordingly.
  • It is very smart to periodically review your insurance policy just like you do review other financial plans like retirement. What was fit then may no longer be suitable due to changed circumstances or financial status. You may need more cover today than before or even less. Review your needs regularly and periodically and adjust as needed.
  • Insurance provided by the employer is good but you should not sorely just depend on that as it can be very risky and may not offer you enough protection. It is normally general in nature and may not need your specific needs. Supplement it with a personal term insurance cover package for yourself and family.
  • Overlooking expenses that should be considered. Most people when shopping for insurance coverage tend to primarily focus on expenses that are most obvious which leads to being hugely underinsured. Take some time and note down all your current and anticipated needs for yourself and the whole family.
  • Do not assume that some situations like smoking or other situations cannot be covered. Be honest with your insurance agent and they will assist in getting you the right coverage. Update your medical records as tests reveal them later. That way, your policy can be adjusted accordingly to fit the changed scenario
  • Many make the mistake of only insuring the breadwinner. Others too have value which cannot be quantified in financial terms. As you plan to take out that cover, put such factors into consideration
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