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Insurance Article

This is Why You Should Review Your Policy Portfolio

September 08 2019

Periodic review of your policy portfolio is imperative at a time when the insurance industry is undergoing a rapid transformation

Policy Portfolio

Insurances are contracts designed to protect your financial interest in the face of uncertainties. They offer protection by directly compensating for a loss or by providing financial means to combat an emergency. Bringing your assets under insurance cover is a prudent decision.

However, today, in a highly competitive market, insurance products are also undergoing radical changes. Insurers are continuously coming up with new and advanced policy features.

So, merely availing insurance cover is no longer enough. Periodically you should review your plans and ensure that they are still relevant and beneficial.

Benefits of policy evaluation

Evaluation of your policy portfolio may involve time and effort. But it inevitably comes with its perks. With this you can:

Avail the best protection

The threat to your health and assets changes with time. Your existing insurance plans may not be enough to combat them. For example, with a rising number of Dengue cases in India, some health insurers have launched a cover for the disease.

Car insurance in India has evolved with the introduction of Usage-Based Insurance (UBI). With premium rates subjected to driving behaviour, your safe driving practices may be rewarded with lower premium quotes.

Select additional features

Insurers today pack their policies with various attractive additions. While reviewing your portfolio, you can select the ones that suit your requirements. Features like a free annual health check-up for health insurance or roadside assistance in case of vehicle breakdown for car insurance are bundled with the products. If chosen carefully, they may cut down on your overall policy costs.

Adapt to status quo

The application of your existing policies should be tested against present conditions. You should review and modify as situation changes. For example, before renovating your home, you should verify if such modifications are covered in your home insurance plan. Similarly, an increase in your travel frequency may attract higher premium rates for your car insurance to maintain optimum coverage

Prepare for the life ahead

You need to review your insurance plans upon accomplishing every primary life goal. Whether it is a change in your employment or marital status, it should be met with the required alteration in the insurance portfolio.

You may need to extend the coverage of your existing health insurance plan to include your spouse and new-born child. You can also take proper health insurance riders to meet the requirements of your new but stressful professional role.

How to review your insurance policy

Reviewing the insurance portfolio should be carried out with specific objectives in mind. Ideally, it should begin with the question of whether your insurance plans are enough to address all your needs adequately.

You can find the answer by analysing various factors like:

Coverage size

The cardinal objective of an insurance policy is to provide a means to balance out an incurred loss. Verify whether your existing plants passes this test.

For example, while evaluating your health insurance, you must make a practical and honest evaluation of your lifestyle habits like smoking and drinking. Your health coverage size should be big enough to include the treatment costs for the diseases associated with such lifestyle, should they arise in future.

Similarly, your car insurance should have provisions to take care of damages to your vehicle, possibly resulting from your driving behaviour.

It is advisable to factor in inflation while calculating your coverage size.

Policy premium

Are you paying too much premium for too little coverage? While it's prudent to look for affordable policies, it should never be at the cost of the protection it offers. A detailed cost-benefit analysis is necessary to ensure that the cover is not compromised to avail of cheaper policies.

To assist you in the process, insurers provide online insurance premium calculators equipped with advanced features. It can help you find the best available health insurance premium quotes. All you need to do is just input few necessary details.

Ease of access

It is a significant factor to consider given your busy daily schedule. Nowadays, reputed insurers like ICICI Lombard offers a comprehensive insurance portfolio, online. Apart from buying new plans, various services like payment of premium, policy renewal and claim registration are only a few clicks away.

Modern insurers seek to educate their clients, both existing and prospective, on various aspects of insurance. They offer a host of resources on their websites to keep you up to date about the insurance space.

This knowledge can help you in making informed choices while reviewing your insurance portfolio. However, an effective and impactful evaluation calls for a thorough understanding of your needs and the features of available insurance solutions. In case you find the procedure to be complicated, it is recommended that you opt for professional help.

Related Article:

How to Calculate Premium Using the Insurance Calculator
Policy Evaluation is More Important Than You Think

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