National Insurance Awareness Day 2024: How to choose the right insurance policy? Here are 4 tips

Insurance is a critical factor that can help to mitigate the risks that are associated with the occurrence of any event in the economy by offering financial coverage to individuals and businesses. Whether you are buying insurance for yourself and your family or for a business, it should be a well thought through process and involve critical analysis of the risks we are seeking protection against.

Assess Your Needs: It is important to devote adequate time to have a clear understanding of your requirements while initiating the process of buying insurance. When choosing personal insurance such as health or life, lifestyle, quality of healthcare, family responsibilities etc should be considered.

If you are purchasing insurance for your asset such as a vehicle, home or even jewellery and artefacts, consider what could potentially damage it, what kind of financial losses would you incur, how much would you want to be protected for and so on.

For business insurance, consider the type of business you are in, all risks that are common in the business and legal requirements. Even though the types of coverage change from one insurance provider to another, knowing what risks you need to protect against will lead you to the correct kind of coverage.

Research and Know Different Types of Insurance: Insurance policies come in various forms, each designed to address specific risks. Common types include health insurance, auto insurance, property insurance, liability insurance, and business interruption insurance. Research each type to understand its coverage limits, exclusions, and benefits. This knowledge will help you narrow down options that align with your needs.

Compare Insurance Providers: It is also important to understand that the insurance companies are not equal in terms of available coverage, services, and costs. Research and compare multiple providers to find one that has a strong reputation for reliability and customer satisfaction. Look into factors such as financial stability ratings, claims processing efficiency, and customer reviews. A reputable provider ensures that your claims will be handled promptly and fairly when the need arises.

Understand Policy Coverage and Exclusions:Scrutinise policy documents to ascertain areas that are likely to be covered by a policy and the ones that are likely to be out of policy. Be careful with terms and conditions, limits of coverage, warranties, and other prominent features that can be only found in small print. While some policies could come with certain clauses that put a condition on when they can afford coverage. Make sure that the policy you select provides you with sufficient protection to the risks you established during the needs analysis.

Consider Affordability and Value: Although it cannot be the overriding reason, its importance should not be underestimated and its relationship with the coverage offered should be examined. While comparing premium costs between policies and insurance providers, there should also be consideration of the cost that comes with gains in coverage. In some cases, one can spend a little extra per annum or select an add-on to secure better benefits or merely a more reasonable treatment by insurance companies.

All of this might seem overwhelming to a person but the internet , as always, is an excellent discovery platform. If you need more help, just reach out to one of the many insurance companies that operate in the country, all of them would have their call centres which will be able to assist you in the process. You could also consider consulting with an insurance advisor.

These experts are in a position to offer advice and suggestions that will suit your requirements. They can also assist in explaining the specific provisions of policies and use them to guide you in making a wise decision.

Review and Update Regularly:Insurance is not a one and one kind of thing, it needs to be constantly reviewed against the requirements which could always change. Most insurance policies are annual in nature, so that should anyway nudge you to review them once a year at least.
 

Choosing the right insurance policy involves assessing your needs, researching the available options, and carefully reviewing the policy details. By following these steps, you can select insurance coverage with confidence, ensuring it provides the necessary protection for you or your business. In essence, insurance safeguards your finances when you need it most, making it a crucial aspect of financial security for everyone.

Shanai Ghosh, MD & CEO, Zuno GI