Why is it necessary to compare insurance plans before buying a policy?
What is the first thing that you do when you want to purchase a new phone? You go online, look for reviews and then make a decision based on popular opinion. When you can do this for your new phone, restaurants, grocery products, etc., then why not for your insurance policy? With so many choices out there, it can indeed be a daunting task to choose the right insurance policy. This is where insurance plans comparison becomes an important task for anyone before arriving at the choice of insurance policy that suits your personal and financial needs.
In today’s day and age, people want to consume as much information as possible. They want to be sure of the purchase decisions they make. Additionally, the internet has also provided us with various platforms to express the opinion on products, services, movies, music, and practically everything under the sun. With the availability of so many reviews, it is has become easier to compare products and services online.
In Singapore, there are many established websites that can help you with reliable information on insurance plans comparison.
Factors to compare before buying insurance
When you finally get down to comparing different insurance policies online, here are a few factors that you need to look into before buying insurance:
One of the key determinants of a good insurance policy is its scope and coverage. Every policy will have a list of expenses it can cover for you. In case of health insurance plans, certain policies offer benefits like doctor’s fees, ICU room rent, pre and post hospitalization charges, and ambulance charges. These are usually the most commonly covered expenses. But benefits like domiciliary expenses, OPD expenses, cost of alternate treatment like Ayurveda, Homeopathy, Unani, maternity coverage, etc. should also be looked into. Your insurance policy is said to offer better coverage than the usual if it covers these unusual benefits. Similarly, even for whole life insurance, you should check for the coverage as well as the savings component called ‘cash value’.
After coverage, this is the second most important factor to look out for in a prospective insurance plan. Usually, online insurance policies offer lower premiums as they save on distribution channel expenses, infrastructure, and other overheads. So, you get to save money while you pay lower premiums.
This is a factor that customers look for in almost all service offerings. Some of the qualities that make the customer service of a financial company stand out are a resourceful website, a 24×7 helpline, a relationship manager who is always there to solve your policy-related queries, and comprehensive email support.
Level of paperwork
Whether you like it or not, all financial services demand some level of paperwork. But these days, companies are trying to reduce the hassle by digitizing the entire documentation process. Once you choose a policy, you need to fill a detailed online form, choose supporting documents and submit (upload) them through an easy and secure user interface. There is no need to create photocopies, seek certificates or courier documents. It is a hassle-free process.
The cheapest insurance plan may not be the best
Many people tend to have this notion that the cheaper the insurance plan, the more favourable it is. But in reality the cheapest insurance plan may not be the right one for you. Although various plans seem to be similar, they are not entirely the same. According to Timothy Ho of Dollar & Sense, if you were to buy an insurance plan for an older person, then you may find that ranking of plans based on price alone may not be a fair way of deciding which one is the best. As they may have different rankings for different factors. While choosing your insurance policy, you cannot purely choose to look at the premiums. You should also look for flexibility options. Some policies give you the provision to convert them if and when the need arises. For example, the Aviva MyProtector Term Plan is convertible to whole life or endowment. Manulife ManuProtect term provides its customers with a unique ‘quit smoking incentive’.
Hence, while doing your insurance plans comparison, you should be able to look beyond the price aspect.
It goes without saying that you ought to compare different insurance products to end up with the best one. Even then, what may be the right policy for person A may not be the right policy for person B. Getting a clear picture of what every financial company offers will help you arrive at a decision sooner and you will have logical reasoning to support your choice.
This is basic cost-based comparison. The website also provides detailed comparisons for all factors.
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