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Insurance Article

Policy Evaluation is More Important Than You Think

January 19 2019
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Purchasing your insurance policy isn’t the be-all and end-all. You should evaluate your policy in order to make sure your coverage is never compromised

Getting the right insurance policy is more of a moral obligation, simply because it has a pivotal role to play in securing, besides yours, the future of your loved ones as well. As the old saying goes, life is certainly a roller-coaster ride, parts of which are exciting and some, filled to the brim with uncertainties that have this habit of biting when you would least expect it to.

But, no matter how unforeseen this ride may be, there’s one right that you almost fundamentally enjoy in the rulebook of life – the right to stay prepared and protected at all times. Be it your car, two-wheeler or health, getting an insurance policy of the right coverage is of significance. Purchasing the insurance policy notwithstanding, you should ideally evaluate and reconsider your coverage with every major change in your life.

Here’s a guide as to why evaluating your policy at the right time can make all the difference:

There has been a change in the status of your employment

Nothing is constant in life, and that’s why they say change is the only constant. The current job market is volatile, to put it correctly. While your present stint could well be a short-lived one, there is the chance of you being promoted up the ranks as well. No matter the situation, it will, in all likelihood, impact and alter your annual income.

With a change in income, lifestyle changes automatically follow suit. This is exactly why a change in your status of employment warrants a reactive evaluation of your insurance policy.

You’re getting hitched

Marriage is a strange juncture, one that might usher in a myriad of changes in life. Once hitched, your priorities slowly start fusing and what didn’t seem important till even a year back, could occupy the pole position on your to-do list.

While there are the obvious changes that you might make in your life, you would also have to consider your partner’s lifestyle and health. For instance, you might have to modify the standard coverage of your health insurance policy in order to make sure the sum assured is sufficient and canopies the new member you have decided to spend your life with.

You’ve introduced other changes

One of the better examples of an almost certain change is the need to buy a bigger vehicle that can fit a family of three or four comfortably. While you might’ve had done perfectly well with a two-wheeler till this point in time, the necessity of a bigger car could be sheer once you have a family.

A bigger car generally translates to higher premiums – the reason why evaluating your car insurance policy assumes great importance then. Also, should you move to a new house with your other half, you would ideally want to safeguard the house against potential damages and losses. Investing in a home insurance policy assumes significance then, considering it provides comprehensive coverage.

Whenever you are at the altar of a massive shift in life, take some time out to list some of the more inevitable changes that should follow. That way, you would be better prepared when you sit down for policy evaluation.

You have become a parent

Parenthood is an experience like no other, but it brings with it a host of changes - primary of them being the fact that you would have to be responsible for another individual now. This obviously warrants you to consider a policy evaluation as you would want coverage that suffices your child's health needs.

After all, one of the most important tenets of parenthood is the additional responsibility it attaches and you wouldn’t want to falter at such crucial a step.

How do you evaluate your insurance policy?

The problem is you might be tempted to decide on your insurer in haste, and that's where you could go horribly wrong as well. It is not necessary for every parameter (that insurers follow) to fit into your needs and financial objectives. Therefore, it is imperative that you understand the different parameters and then proceed with the one that's a custom-fit for you.

Here are a few quick tips that you can follow when you decide to press ahead with policy evaluation:

Coverage

Probably the most commonly heard buzz word whenever someone talks about an insurance policy, checking the coverage is certainly of utmost importance once you start evaluating insurance policies. Check whether the sum insured is adequate so that you don't have to press the panic button in case of damages and losses caused to your home, vehicle or health, for that matter.

Premium outgoes

Here, you will have to strike a delicate balance between the cost of the policy and the sum insured you would be eligible to. Putting it in perspective, on-boarding the most expensive insurance policy might not make sense, particularly if you aren't sure about your finances.

On the other hand, landing the cheapest insurance policy around might not be all that helpful, considering you may have to compromise on the coverage.

Claim settlement ratio

One of the better indicators of an insurance provider's efficacy (in terms of settling claims), probing into your insurer's claim settlement record will give you an idea about your own chances, if and when the need arises to file a claim. A claim settlement ratio, in simple terms, is the number of claims settled out of the total pile of claims filed.

Make sure your preferred insurance company boasts of a good claim settlement ratio so that it doesn’t drag its feet when it is your time to get the proceeds from a claim.

Online purchase and renewal of policy

In present times, most experts would swear against visiting an insurer’s brick and mortar outlet in order to purchase an insurance policy. Online policy purchase, besides being a no-hassle approach, offers you extra in terms of comparing various policies, being thorough with the fine print, paying the premiums and submitting documents at ease.

It is this sheer ease that should also take precedence once you decide to move ahead with policy evaluation.

Ease of service

Customer is the king – and it is this age-old business mantra that still doesn’t fail to dictate the shots, even in the realm of insurance. Private insurance companies have a lot to offer to their customers, vis-à-vis their erstwhile counterparts.

It is normal for you to want a website that’s rich in information, a toll-free helpline number that’s truly round-the-clock operational, assistance with claims support and a company interface that’s resourceful and effective. If your insurance company ticks all the relevant boxes, you can be rest assured that your insurance is in the right hands.

Related Article:

Why Is Insurance Still Not a Priority for Most Indians?
Risks Associated with Being Underinsured

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