There are several occasions in life when we ask ourselves if we have really made the right moves. This could be true for decisions in social and even our financial life. Our funds are getting thinner each day with the ballooning cost of living. Investing our hard-earned money in any financial product of a company or a bank calls for keen audit to ensure we are getting value for the same. Often we get recommendations from friends, family or agents and may be tempted to jump in without going deep to ensure we get the right product, especially if it is in a long-term product like insurance.
You are the most important person when it comes to purchasing your health insurance cover.
An insurance policy is a necessity in any financial wellness plan as it covers the risk associated with the loss of life or property. Due to its long-term nature, usually over a year, it is quite difficult to make changes or amend the agreements once purchased. This is why its necessary to spend a little time to research these products to avoid any regrets later. Please understand that it may not be possible for you to understand all the jargon of a life insurance policy. But, you could consider the following factor when choosing your plan:
Choose health cover as per your needs:
Your health insurance cover should always meet your personal needs. You are the most important person in this investment.
The standard thumb rule is that your life cover should be 10 times your annual income so that your family is not impacted financially in case something were to happen to you.
You should also keenly be self aware and account any pre-existing special medical complication or property loans while selecting the life cover. Your financial position should also be taken into account. Get a product that doesn’t squeeze you to the extreme as much as it promises better days ahead. Its a balancing act. For example, in case you need to build a corpus for your child’s education, you can select from a range of products from insurance companies that ensure the funds that you had planned for your child’s education are available whether you are around or not.
Personally i find social media reviews the best place to learn about insurance experience of other customers who are just like you
You need to remember that insurance is a protection-cum-long-term investment and savings venture. To get the best out of it, must clearly define your needs – like your child’s education or retirement – and accordingly buy a policy that will help you meet your requirement in future.
Background check and due diligence:
Once you have decided on the policy that suits your needs, you could conduct a general background check on the company you settle for. All life insurance companies in Kenya have comprehensive disclosures on their websites that give all necessary information. These include policy structure, customer support, terms and conditions, scope of network etc.
Secondly and most important, there are several online sites that help you compare various policies as well as the premiums. Don’t forget to also check the social media reviews from peers. Personally i find social media the best place to learn about experiences of other customers who are just like you.
However, the one thing you need not worry is the financial health of an insurance company. The insurance sector is highly regulated and all companies need to maintain a solvency ratio to ensure that the customer does not suffer.
Does the insurance company have other investments, how are they doing? When buying a cover, its important to find out how the company investments are doing. This can be found in their published accounts, online sources and other sources. You could look at the past performance of the company. All life insurance companies provide details of their funds’ performance online. An important thing to consider here would be stability. A company with a good fund performance will have a consistent track record with the fund performance neither being erratic nor extremely risky.
Claim settlement ratio:
Many experts advise that the claim settlement ratio of an insurance company should also be considered when buying a product. The most common cause of delayed or rejected claims is improper filing of details in your policy form. As I mentioned earlier, the insurance sector is highly regulated. Hence, the chances of a rightful claim not being settled is rare. In fact, the average claim settlement ratio of the insurance sector is above 80%, and most companies have health ratios.
Understanding the policy:
Once you have settled on the suitable product based on your need and track record of a company, you should understand the full features of the policy, specifically those related to the policy term, premium-paying term, maturity date and charges. You must also understand the benefit structure of the policy. Get to know about the charges, taxes, and any other costs to ensure you are in the same line with your provider all through.
These simple but effective checks will put you ahead and be able to address your initial questions. Your policy will then be a source of relief and assurance in your life than otherwise. And, in case you have second thoughts about a policy after buying it, you can make use of the ‘freelook’ facility, which allows you to return the policy to the insurance company within 15 days of buying it for a refund.