7 Questions You Should Ask Your Insurance Agent
Purchasing life insurance is one of the most important decisions of your life. This is why you must be very careful before getting a life insurance policy. There are several things that you must familiarize yourself with before getting into a policy, including claim settlement ratio, insurance premium value, insurance underwriting, and solvency ratio.
This can be quite overwhelming. This is why we are going to help you out today by talking about the top seven questions you need to ask your insurance agent.
We have created a list of those questions. And these questions are mentioned below.
1. Is the insurance company credible?
The credibility of an insurance provider is very important. And this is why this should be the first question that you ask your insurance agent. Ideally, the insurance company that you select should not just be credible but should also be trusted and reputed.
You can also ask your insurance agent to share some specific details about the insurance provider like:
- Who is the director?
- What is the year of establishment?
- What is the degree of financial stability?
- How is the geographical presence of the insurance provider?
You should also make sure to check the claim settlement ratio (CSR) of the company before purchasing a health insurance policy. The CSR value will indicate the number of claims settled by the insurer against the total number of claims that have been received by the insurance provider. Usually, the higher the CSR, the better will be the credibility of the company.
Beyond this, take a look at the rate of return offered by the insurance provider in case of a guaranteed return insurance plan. Make sure to also know the guaranteed additions made by the insurance provider in the guaranteed return pension plan.
The objective of this entire exercise question is to choose a company that offers a high rate of return or the best protection.
2. What type of policy should I buy?
There are different types of insurance policies available in the market. This is why you must carefully go through the policy details before investing in one. Ideally, if you are looking for a pure life cover, then you should opt for a term plan.
On the other hand, if you are looking for a market-linked investment plan along with insurance cover, then you should get a ULIP (Unit-Linked Insurance Plan). If you are looking for a secure plan that provides guaranteed returns on your investment and comprehensive insurance cover, then you should get a guaranteed return plan.
Once you have a good idea about your needs and what exactly you are looking to get out of your insurance plan, then you can find the best insurance plan for yourself and your family. You should also have a clear idea regarding the cover required, financial needs, risk appetite, and investment horizon.
3. What are the benefits of the policy?
Depending on the type of insurance plan that you want, the insurance company will give you several benefits. Some of these benefits can be guaranteed while the others might be variable. For example, a term insurance plan will pay out a defined death benefit but nothing else.
A ULIP plan will pay a death benefit and maturity amount but the returns of the plan will depend on the conditions of the market. On the other hand, a guaranteed return pension plan will pay out a fixed return on investment along with additions from a particular policy year onward.
Irrespective of the policy you get, you should make sure that you are familiar with the benefits and the conditions that are related to the policy. This will ensure that in case of an emergency, you are familiar with the benefits that are owed to you.
4. What are the different types of riders available in the policy?
Once you are sure about the policy that you want to buy, then the next thing is to look at the riders available with the policy. Also, if you feel that the benefits that are provided to you with your policy are not enough, then you can get additional riders.
These additional riders are available at an extra or added cost to the premium value. Some riders that are often provided with health insurance policies are:
- Critical illness rider
- Waiver of premiums
- Income benefit
- Accidental death benefit
- Accident total and permanent disability benefit
- Payor waiver benefit
5. What are the premiums of the policy?
One of the most critical aspects of your insurance policy is the premium amount that you need to pay. The premium value will depend on the type of policy, duration of the policy, and the sum insured value.
Apart from knowing about the premium value, you should also ask if there are any additional costs that apply. It is also a good idea to be familiar with the flexibility to pay premiums. This refers to whether you can pay the premium annually, semi-annually, quarterly, or monthly. The object of this question is to make sure that the premium value fits your budget.
6. What happens if you do not pay the premiums?
A life insurance policy is a long-term commitment in which one is required to pay the premiums to keep the policy active and avail of the benefits. This is why one must keep the premium due date and value beforehand. You should ask your health insurance agent regarding the same.
You should also ask if there is a grace period. One should ask if there is a revival period or till when the policy will remain active in case of a delay in paying the premium amount. You should also know if you can surrender the policy if required.
7. What is the claim process?
During your time of need, you don’t want yourself or your family to struggle to get the claim amount. This is why you should be familiar with the claim process. Ideally, you should also make sure that your family members are familiar with the claim process so that everything can flow smoothly during a medical emergency or your time of need.
Your insurance policy will provide you and your family with financial security in the future. This is why you should ask all these relevant questions from your insurance agent.
