Taking out insurance premiums for your life, health, mortgage, vehicle and business is an absolute necessity both by law and by your needs. However, as much responsible as we are, sometimes a few insurance mistakes while buying and maintaining them costs us more than we anticipate. Below is a comprehensive list of ten such mistakes one generally makes with insurance policies so that next time, you are doubly sure about the welfare of your own and your loved one’s lives.
Not insuring soon enough
More than often, the thought of insurance comes to our minds only after a crisis has hit us. We feel that we are too young and it is too early in life to think about insurance and obtain one. Sometimes when life is good, we feel super confident and tell ourselves that no matter what we can handle crisis. As much as we would like to believe it, more than often life poses certain difficulties which can become extremely difficult to handle. Recent statistics revealed that 1 in every 29 children might lose a parent before they complete their full time education, therefore, is it really worth the wait?
Insurance policies assist us to restore ourselves to our former situation in the least amount of time. Therefore, waiting to take out an insurance cover will be one of the gravest insurance mistakes.
Not being insured for the correct activities
It is imperative to know what kinds of cover you would require for yourself and your family to help lead a tension free life. Life Insurance is by far the most important insurance of all. It ensures that in case anything happened to you, your loved ones will be taken care of. Insurance mistakes such as not being insured for the correct activities can prove fatal in the long run.
Buying excess or little cover
You should pay for exactly what you are being covered for, not too much, not too less. If you miscalculate your requirements, such insurance mistakes could cost you a lot of insurance premium unnecessarily. Whether it is your home, car or business, selecting the right kind of insurance is crucial to guarantee your protection. Buying excess cover might simply drain you out of your money without any lucrative benefits while paying too less might not help you in securing your assets during emergency.
Not knowing the complete nature of the cover
Most of us find reading the associated terms and conditions of a policy gruesome. We perceive the literature as unnecessary and sign on the accepting documents thinking it is ok, wherein in reality it is one of the disastrous insurance mistakes. The market is flooded with numerous insurers who have their own terms and conditions against the policies they offer, therefore the responsibility lies with us to seek a complete understanding of what we are signing for. Should you seek clarification in any of the clauses, you can get in touch with your insurance agent or the insurer directly.
Believing in the prevalent misconceptions
Even today, in the UK, about 61% of families are not covered with life insurance. Now this is an alarming rate, considering that life insurance policies are the first and the most important of policies that a person could take out. Many of us believe that we are making insurance mistakes and insurance claims, especially life insurance claims will not pay out, wherein in reality 99% of the claims made are fulfilled. Some others believe that taking out insurance policies is a tedious and long procedure, wherein it can actually be completed quite simply.
In a world filled with insurers selling misconceptions filled insurances, it is imperative to look for the appropriate insurer and cover to guarantee a safe and hassle free coverage and claims procedure.
Not requesting an exclusion to be reviewed
Every insurance policy has general exclusions, applicable for all appliers and specific regulations, applicable for an individual policy. Unlike general exclusions, specific regulations can be can be reviewed and removed after a certain period of time. If this is not done, such exclusions may remain as insurance mistakes in your policy and interfere with a claims process later.
Hiding information with the insurer
Although chances are that your insurer might never be able to find out what you have lied about, it is necessary to be open and honest while filling in the insurance application form. Any breach or inconsistency later might lead to grave consequences including your claim getting invalidated, therefore always be truthful with your declarations. Whether you are a smoker or have a pre existing illness, it is necessary to not make such insurance mistakes and to make the appropriate declarations, even if that means paying a higher premium each month.
Not conducting enough research before buying a cover
The latest advertisement of an insurance cover should not be your only knowledge of a particular insurance cover. An extensive research has to be done by reviewing several policies of the same type and then comparing their covers and quotes in order to avoid insurance mistakes. Once you have gained a thorough understanding, you will be in a position to make an informed choice about the ideal cover which will suit your needs.
Not buying as much as you can pay insurance for
There is no point in buying a lavish house or a luxury car and then negotiating on the insurance and ending up paying for as little cover as possible. Ensure that you buy assets keeping the insurance premium in mind and strike a rightful balance between the two. Securing yourself should be your aim immediately after acquiring.
Not maintaining all the documentation
Many of us do not maintain appropriate documentation for the various insurance policies we hold. Keeping the documents handy not only helps you track back whenever required, it also gives you a snapshot of your insurance buying and claiming history. This needs to be maintained and updated periodically and kept for the rest of your life.
Awareness is the key and once you learnt the tricks of the trade, buying and maintaining insurance policies will not seem as cumbersome as it felt in the beginning. Being alert given you a better living and prevents you from falling into the traps of dire insurance mistakes.
After all, being a smart and responsible insurance payer is one of your most important duties.