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  1. Buying insurance policy; 5 key things to keep in mind before signing the contract

Buying insurance policy; 5 key things to keep in mind before signing the contract

Insurance products range from one-year renewable contracts under general insurance to long-term life insurance contract running into several decades.

By: | Published: August 24, 2016 3:32 PM
Buying insurance policy; 5 key things to keep in mind before signing the contract Insurance products range from one-year renewable contracts under general insurance to long-term life insurance contract running into several decades. (Photo: Reuters)

Buying insurance cover, whether it be a life or non-life such as health and motor insurance, is a must in everyone’s financial portfolio. However, purchasing insurance requires a huge amount of due-diligence on the part of the customer. Insurance products range from one-year renewable contracts under general insurance to long-term life insurance contract running into several decades.

And once you sign on the dotted line formalising the contract with the insurance company, the document becomes the reference point for any future claims. So you need to be careful while filling in the details so that there are no disputes when the time arises to refer to the policy to make your claim. After all you are paying your hard earned money to get the desired cover and it would not be denied the claim amount against losses or your near and dear one’s are not denied of the insurance money in case of your untimely death.

Here are 5 things that you should keep in mind while purchasing an insurance policy:

-You should be truthful in the information you provide in the proposal form. The inputs you provide will be formalised in the contract. Any discrepancy between the information you provide and actual facts may lead to denial of claims when the need arises to invoke the policy.

-Other than providing the correct information, you should also ensure that you fill in all the relevant information sought by the insurance company. Lack of information may also lead to disputes at a later date which might cause pain to you or your survivors.

-You must full in the form yourself to ensure that the information that is being provided is correct and complete. Agents often ask you to sign the form with the assurance that they will fill up the necessary details from what they have from your previous interaction with them. Do not agree. Make it a point to sign only after going through all the details that have been filled and being convinced that they are correct.

-Other than providing correct and complete information about yourself, you need to be careful to fill in the proper details of the nominee under the policy. The nominee comes into play when the policyholder is not around and one needs to be careful that there are no hindrances in the way of availing the insurance claims for a secured future.

-Always choose a premium plan that you can afford over the entire period of the policy. Also the term of the policy should suit your needs and responsibilities. Keeping your overall financial position in mind while deciding your premium amount will ensure that the policy will not lapse because of your inability to pay the premium.

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