An insurance policy is a contract between you and your insurer in which you pay a fixed amount of premium and in return, the insurer provides a cover for the insured event or property or asset of yours. Risk is always associated with risk of life, death, risk of accident. Although unfortunate events like these can’t be avoided because they are mostly out of our control, but still we can minimize such risks by making alternative financial arrangements so that our life and those of loved ones, wouldn’t be affected. Buying an insurance policy is a lifetime decision and that’s why it shouldn’t be done in a hurry.
There are many things which should be kept in consideration before buying an insurance policy so that it will cover all your financial requirements at an appropriate cost. So to help you with the hassle of buying an insurance policy, mentioned below, is the step by step guide for buying an insurance policy in India.
1. Know Your Need of Buying Insurance
First of all you need to understand your need of buying an insurance policy. There are different types of insurance available in the market and each policy serves different purposes. Like under Life insurance policy, you have the option to choose from Term insurance policy, Whole life plan, Endowment plan, Unit Linked Insurance Plan, Money Back Policy, under a health insurance policy, you have the option of critical illness plan, indemnity plan, etc. A Term insurance plan gives you an economical way of getting cover while a Unit Linked Insurance Plan gives you option of investment in addition to life cover. So the type of insurance policy you choose will depend on your initial motive of buying it.
2. Analyze the Amount of Cover You Need
After deciding on the type of insurance you need, the next thing you need to do is to analyze the amount of cover. Most of the people make the mistake of calculating their amount of cover only on a single factor, but that is not the right way. A right amount of cover is an outcome of different factors which are kept in consideration. For example, while buying a health insurance policy, you should keep always consider current health situation, inflation in health care, hospitalization requirement, etc. Always consider the different factors related to your insurance while deciding the type of cover. So sit back, relax, take important points into consideration, make the required calculations and then decide the right amount of cover.
3. Filter Your Search According to Your Requirement
There are innumerable insurance policies available in the market. Each policy has its unique benefit and you need to filter out your search according to your requirement. For example, riders available with the policy, maximum age limit, renewability age, accident cover, etc. Make a pool of the best policies available in the market, so that choosing a policy will become easy for you.
4. Compare Your Shortlisted Plans
After choosing some of the best policies available in the market, you need to compare those best policies. An insurance web aggregator can help you to compare insurance policies. There are many insurance web aggregators, which provide unbiased and easy comparison of different policies. Your comparison should be based on policy coverage,benefits,key features,add-on benefits, easy claim settlement process, good service during and after buying the policy, etc.
5. Choose the Plan and Read the Fine Print
Now you need to choose the best insurance policy from your filtered options after comparing different parameters. There are many circumstances under which your insurer is not liable for providing you any cover and you should know them well. Go through the policy wording of your chosen insurance plan. Understand the terms and conditions, exclusions and inclusions of your policy and get your query solved before buying.
6. Complete the Documentation
So now you have chosen the best policy and have gone through the fine print also, now it’s time to complete the documentation required for the purchase of the policy. The process of document submission has become very easy in this tech-savvy world. Generally, you are required to submit id proof, address proof, pan card and passport size photo. You also need to submit the proposal form after filling it. Always be honest, while mentioning the details in the proposal form to avoid any turmoil in the future.
7. Make Payment
You have various options of making your payment for the insurance policy you have chosen. With the advancement in technology, payment for insurance policy has become very easy and quick. You have the option of making payment through cheque, debit card, credit card, net banking, etc.
8. Wait for the Insurer’s Decision
After making the payment, you will have to wait for the company’s decision to approve your request of insurance policy. It usually takes 7-10 days for the company to decide to grant you a policy or not (if you are unfit for the company to cover the risk), after which the insurer sends the policy document to you.
A well understood insurance policy is the best policy for you. Follow the simple steps mentioned in the article and choose the best insurance policy for you. It’s a decision which will have a financial effect on your whole life, so take your time and make a wise selection timely.