Mudra Compass

Many times we have heard of claim rejection in some cases. Due to intervention of the High Court or the Supreme Court, some get their claim from the insurance company. Here we are giving you some steps to consider before taking an insurance policy.

What is insurance?

Insurance is a way to manage your risk in some unforeseen situation. Insurance can protect you against unexpected financial losses. You need to pay a certain amount either yearly basis or as per the term of the policy to get insurance called a premium. There are two types of insurance: Life Insurance and General Insurance.

What is the difference between Life Insurance and General Insurance?

Life insurance provides financial protection to policyholders and pays a death benefit to the nominee when the insured dies unfortunately. General insurance provides financial protection for tangible assets such as crop, houses, cattle, etc against unforeseeable contingencies like damage and loss of assets.

Let’s understand in detail about various types of policies

Life Insurance

In this policy, the nominee will get an insurance amount in case of the unforeseen death of the policyholder. Most earning people have this policy.

Motor Insurance

It covers compensation for death or any bodily injuries for you and damage to the property of third parties due to accident. Insurance companies handle the legal proceedings related to accidents.

Health Insurance

It protects against unforeseen major or minor health issues as per policy inclusion.

Property Insurance

It covers your tangible assets like building, land, shop, house, office, etc against any damage or loss of assets.

Travel Insurance

It protects you against loss of luggage, delay of a flight or cancels of a flight, or loss of any documents during travel.

Mobile Insurance

Those who are using costly mobiles should have this policy to protect their mobile against damage, repair, or theft of mobile.

Bit-Size Insurance

In the bit-size policy, you can avail policies for a certain period. For example, you can get a policy to cover Covid-19 where the policyholders get treatment costs for a specific time.

Child Insurance

Parents take this insurance for the education of their children. Some policies are for girl children for their education and marriage.

Which things should you consider before choosing the best-suited policy?

You need to consider the following pre-cautionary tips choosing the policy:

• Do not just buy a policy only considering any one insurance company but compare different policies and plans. If you want more information, you can contact the authorized insurance agent of that insurance company but before that checks their authenticity before making a purchase decision. Now-a-days, many online tools and websites are available to compare and research insurance products.

• Before considering a policy, ask yourself some questions. Such as, why do you need an insurance policy? To whom do you want to cover under the policy? What is your budget to pay the premium? What is your preference for policy tenure?
• First, you should take basic and important insurance such as car, health and life insurance. Then only consider other insurances.
• Before finalizing insurance, check the claim ratio of the insurance company and ask them in which situation they are not ready to accept the claim.
• If you already have a policy, you are thinking of a second policy. Consider checking the same company policy. So, you can get a multi-policy discount, loyalty program, and other benefits.
• Do not avoid your premium because that will create issues at a time of maturity or claim settlement. You can inform the insurance company, if you do not want to renew it.
• Take details of all other services related to the insurance policy well in advance.

• Save yourself from mis-selling because agents show those benefits which are not part of the actual policy. Because they are getting a commission on every policy, they sell.
• Avoid taking a policy you do not need under the influence of agents. Discuss with experts at your level to understand your need for policy or not.
• Be cautious about fraud calls. Do not buy any policy over a call.
• Before signing any insurance policy documents, read them properly.
• Research your level of insurance products before making a purchase decision.
• Review your insurance needs every year without fail.

 
Do you need to buy insurance at a younger age?

Many of you think that I am young. So I do not need insurance at a very young age. But this is just a misconception. You consider purchasing insurance at a young age to get certain benefits.

• You get a policy at a lower premium when you take it at a young age. For example, you are giving a monthly premium of Rs. 8000 at the age of 45 years to get 5 lac insurance cover, the same coverage you get by paying a premium of Rs. 6000 at the age of 35 years, but when you are at the age of 25 years, the same cover you get by paying only Rs. 5000.
• Most companies provide insurance coverage to their employees. Due to that, people are refraining from taking insurance. Remember, with an increase in age, the chances of getting a disease will also increase. Hence, the single insurance policy will not be sufficient to handle expenses, and you need to buy medical insurance separately.

What should you take care of while claiming the insurance?

Before claiming your policy, you need to take care of the following points:

• Keep necessary documents, records, and receipts safe in soft and hard copies.
• Note down all damages incurred due to rainfall.
• You can click photos and shoot a video of all damages also.
• List out all items in your home and you should be aware of all household items before filing a claim.
• Remember that you should process claims within a specific time limit only.
• Always check rules and updates related to insurance regularly.

What should you do when insurance companies fraud with you, or you feel some conspiracy in policy? 

If you have purchased an insurance policy, you are having issues with it. But the insurance company is not resolving it. You can complain to the insurance ombudsman with IRDA if you are not getting a response within 15 days from the insurance company.

We hope we have cleared many doubts about an insurance policy which will help you when you are about to buy an insurance policy.