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When looking out for a life insurance policy, there ought to be a lot of questions in your mind. Life insurance in an investment in the future of your family, and it should be bought with utmost carefulness and after complete research. Do not hold back your questions and clear all your doubts before you start paying your insurance premiums.
Just like when you buy an appliance, it is advised that you evaluate the product thoroughly and enquire about the manufacturer on all the necessary parameters. Do not refrain from asking questions about your life insurance policy, to start with, you can ask the following questions to your life insurance agent for your own satisfaction.
There’s another question you need to ask, that is if your insurance advisor is qualified and authorized to suggest life insurance solutions. As a first step, ask your insurance agent to provide their Insurance Agent License Number and when was it issued. This will give you an idea of the agent’s experience in offering life insurance solutions.
Also, as a precautionary measure, you should save their contact details, and of their manager’s along with the branch office out of which the insurance agent operates.
Key takeaways
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The answer to this question is of great importance for you as the person investing in a policy. In fact, it is the brand value of the organisation that helps take the first step toward building trust. Ask the agent likely appointed by the company to share details about its background, how long it has been functioning, its financial condition, what is the company’s claim settlement ratio, what is its presence and reach, etc.
Claim Settlement Ratio is the number of claims passed by an insurance company in a year’s time. Sometimes also referred to as the Claims Paid Ratio, it helps determine if the insurance provider is reliable. One must always consider checking the claim ratio of a company before buying a life insurance or any kind of insurance plan such as health, savings or ULIPs.
Ask your insurance agent for details about the policy and the benefit guarantees given by the company. Ensure that those benefits are somewhere in writing or a part of the policy document that will be provided to you. For most life insurance plans, the foremost guarantee is that of a death benefit. Confirm and be sure of the amount your family will receive in case of an unfortunate eventuality, as well as the conditions that pertain to it.
Some other life insurance plans may also offer a maturity benefit that offers a definite sum to you when the tenure of the policy is complete. However, the prerequisite of claiming a maturity amount is that all premiums be paid in time and the terms under the policy contract are completed.
One of the first things an agent is supposed to do is read out the benefit illustration of the policy you selected. However, during the buying process of the policy, you must ask multiple questions about the benefits of a particular feature of the policy, the plan options, and any additional riders offered.
You may want to start with questions like what is the best plan for you basis your current lifestyle and income? How much cover will be enough for you or what will be the amount paid to your family in your absence? Moving on, you should also have clear facts about the most preferred plan type, any riders that may help you enhance your coverage and their benefits in the long and short term.
By definition, insurance premium refers to a specific amount to be paid periodically by the insured individual to maintain their insurance coverage, as calculated by the insurance company. It is important that you know what your premium amount is and if there are any additional charges you may have to pay. Another important factor worth considering is the premium payment term or the duration for which you will have to pay the premiums.
There are insurance plans that may cause your premiums to increase/ decrease over time, therefore it is important that you are prepared and informed about this change in premium. Premium is the most important component of your insurance policy and determines the benefits you receive, therefore remember to make a note of all the premium related options you choose and features that come along with your selected plan.
If you are buying an insurance policy, you should be well aware of the unforeseen events that might affect the policy’s terms and conditions. Owing to the fact that life insurance is a long-term commitment, one of the major concerns people tend to have is that they might not be able to pay the premiums for a long time. It is recommended that you ask your agent for all the premium payment options available and choose the one that suits you best, for instance, if you wish to make one-time, monthly, yearly or quarterly payments against your policy.
In addition, ask your agent about the grace period offered, if there’s a revival period and what happens if you cannot pay your due premiums in case of a major financial crisis? Will the policy lapse? If yes, will you be able to revive the policy after sometime? Further, you should also know the process of surrendering your policy, god forbid, if you ever need to.
A hassle-free claim settlement process is among the top factors that help you decide the reliability of an insurance company. The key purpose of buying an insurance policy is to ensure that your loved one receives the assured sum in a hassle-free manner. Enquire about the turnaround time taken by the company to pay death claims to the nominees. Is there anything apart from the promised amount that your family will receive? How will they get the benefits?
Apart from these, there is an important question you must ask and be sure of, that is what happens if your nominee is absent at the time of claim dispersal, will the benefit amount go to your remaining family members?
Buying life insurance is one of the major decisions you will ever make in life. These are only a few important questions you should get answered by your insurance agent. The answers to these are important to ensure the financial security of your loved ones. To avoid any claim rejections, you must follow and understand the complete process before actually jumping in to buy the policy. While there may be several people advising you on different topics, a certified insurance agent is the right person when it comes to enquiring about your insurance policy.
Life insurance surrenders surged in 2022–2023 due to missold contracts and dissatisfaction with terms.
Source: BT Money Today
Asking life insurance questions and gathering comprehensive information from your insurance agent is crucial to making an informed decision. It ensures you understand the coverage, terms, and conditions, which helps you choose a policy that best meets your needs.
Failure to obtain full information before buying an insurance policy can have significant consequences. You might end up with inadequate coverage, unexpected exclusions, or higher costs than anticipated. This can result in financial strain during emergencies when you find out your policy doesn't cover certain incidents or expenses. By actively engaging with your insurance agent and asking detailed questions, you can avoid these pitfalls, ensuring you are well-protected and fully aware of your policy's benefits and limitations.
It is important to ask insurance related questions to your life insurance agent because it is a critical subject. Having partial or wrong information about premium payment, sum assured, claim settlement ratio and other important aspects could be a hassle. Struggling with these aspects after buying the policy leads to bigger problems for your family or beneficiaries.
Although you should have the knowledge about everything in your insurance policy, there are certain subjects you should ask your insurance agenet without fail. It is your responsibility as well as right to ask about information related to policy benefits, tenure, payout, and claim.
Asking the right questions when choosing a life insurance policy can significantly enhance your decision-making process by clarifying your needs and options. It helps you identify the coverage amount necessary to protect your loved ones, understand the differences between term and whole life insurance, and assess the reliability and financial strength of the insurance company.
Failing to ask enough questions to your life insurance agent can lead to several negative consequences. You might end up with a policy that doesn't adequately cover your needs, leaving your beneficiaries financially vulnerable. Misunderstanding the terms, such as exclusions or premium changes, can result in unexpected costs or denied claims. Additionally, you could miss out on better options that might be more cost-effective or offer more suitable coverage.
Asking questions to your life insurance agent can significantly enhance your understanding of your policy by clarifying complex terms and conditions, ensuring you are aware of all benefits and exclusions, and aligning the policy with your specific needs and financial goals. Engaging in a detailed discussion allows you to grasp the nuances of premiums, coverage limits, and potential riders, thereby preventing any misunderstandings or surprises in the future.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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