Insurance is a crucial device for managing danger and defending towards monetary hardship, the place the price of residing might be excessive and entry to monetary sources is restricted for many individuals.
From monetary safety, healthcare, funding to authorized necessities and enterprise safety, individuals go for insurance coverage resulting from completely different causes and desires.
Access to healthcare might be costly and restricted. Health insurance coverage supplies monetary help to assist individuals get the medical therapy they want, with out worrying concerning the monetary burden.
Many kinds of insurance coverage insurance policies in India, similar to life insurance coverage and pension plans, additionally function funding instruments, permitting individuals to avoid wasting and make investments cash for his or her future wants.
Certain kinds of insurance coverage are necessary in India, similar to motorized vehicle insurance coverage. Insurance can be essential for companies in India, offering safety towards varied dangers and liabilities, similar to injury to property, theft, and lawsuits.
Anup Bansal, chief enterprise officer, Scripbox, mentioned, “Insurance is a crucial monetary device that helps people shield themselves towards varied dangers. Whether it’s life insurance coverage, medical insurance, auto insurance coverage, or dwelling insurance coverage, buying the best coverage will help you keep away from important monetary losses within the occasion of an unexpected occasion.”
However, buying an insurance policy can be a daunting task, and making the wrong decision can have serious consequences.
Here are five common mistakes highlighted by Bansal, that you need to avoid while buying an insurance policy.
2. Underestimating the required coverage: One of the most significant mistakes individuals make when buying insurance is underestimating the amount of coverage they need. It’s essential to evaluate your insurance needs and make sure that the policy you choose provides adequate coverage. For example, if you’re purchasing health insurance, you need to consider age, family responsibility, health conditions, hospital network, cost of medical facilities, medical inflation, and much more. The coverage amount should be comprehensive of different factors.
3. Purchasing the cheapest policy without comparing benefits: While it’s tempting to opt for the cheapest insurance policy available, it’s important to compare the benefits offered by different policies. The cheapest policy may not provide the level of coverage you need, leaving you vulnerable in the event of a claim. You need to evaluate the costs and benefits of different policies and choose the one that provides the best value for your money.
4. Not disclosing relevant information: When buying insurance, it’s essential to be honest and transparent about your medical history, occupation, and any risky activities. Failing to disclose all relevant information could lead to your claim being denied when you need it the most. Insurance companies rely on accurate information to determine your risk level and set your premiums, so it’s important to provide them with all the necessary details. Even a small miss, intentionally or unintentionally can create a burden on your finances.
5. Not reviewing the policy annually: Your insurance needs may change over time, and it’s essential to review your policy annually to ensure it still meets your needs. This will help you avoid gaps in coverage and ensure that you’re not overpaying for unnecessary coverage. If your circumstances have changed, such as a new car, a new job, or a new home, you need to inform your insurance provider and make any necessary adjustments to your policy.
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