Here are 10 essential things every woman should check before buying an insurance policy.
The pandemic has exposed many to the harsh outcomes of financial negligence and forced them to revisit their saving and investment options. Women today, more than ever, are rising to the occasion and are determined to take financial matters into their own hands. With the plethora of information available, it might sometimes seem like a herculean task to choose the right policy to secure your financial freedom.
To make it easy, we have listed down 10 essential things every woman should check before buying an insurance policy.
1. Dependants: Every woman might not be the breadwinner of her family but that doesn’t mean she doesn’t have dependencies. Having a family and managing one is a huge responsibility itself. Hence, a woman must ascertain the dependents she has at the point she’s planning to purchase her insurance like parents, in-laws, spouse and children, loved ones, etc.
2. Age and medical history: The younger you purchase insurance the better benefits you reap and more benefits are provided to you. But just because you’re late, you shouldn’t hold yourself back from getting the right insurance coverage. Age plays a major role in determining the premium amount while your medical history shapes up your insurance policy.
3. Lifestyle: A person’s lifestyle speaks a lot about their body and mind and hence, is an important aspect while considering insurance. A woman focused on academics will have a different lifestyle than a woman who is a sports enthusiast. This also involves the city one resides in, as the cost of treatment varies accordingly.
4. Nature of job and pay: This point highlights three important aspects- what is the impact of the job on one’s mind and body, how much revenue is one able to generate from it, and if the current employment is providing insurance benefits.
5. Tax Benefits: In addition to health security, payment of medical premiums also provides tax exemption benefits under section 80D of the Indian Income Tax Act 1961.
6. Type of Policy: There are various types of insurance policies available and it is important to understand which type is ideal for you to ensure you get the maximum benefits without incurring a discretionary cost. When we talk about life insurance, the options usually considered are whole life or term plan while there are various options like MoneyBack policies, Endowment policies, etc. Hence, it is important to first explore all options and then make an informed decision.
7. Claim Settlement Process & Ratio of the insurer: It is important to understand how to redeem the benefits of insurance in case of an emergency. The claim settlement process varies for different insurance providers and it’s important to identify which is the most convenient to you. The Claim Settlement Ratio is the ratio that indicates how many claim the insurer has successfully settled. An insurer with 95%+ CSR is a healthy insurance provider.
8. Medical assistance: This includes hospitalization charges, ambulance charges, room rent capping, pre, and post-hospitalization cover, cashless facilities, etc. It is important to identify the same as the policy should not cause hindrance at the time of treatment. It includes different types of riders and benefits too.
9. Premium amount and Co-payment: Premium amount is the installment one pays to available insurance benefits. Co-payment is the percentage of the claim amount that is borne by an insured person, while the rest of the amount is paid by the insurer. It is necessary to be aware of these amounts as this is what one shall be liable to pay.
10. Waiting period: A waiting period is the amount of time an insured must wait before some or all of their coverage comes into effect. The insured may not receive benefits for claims filed during the waiting period. It helps to control unethical practices by the policyholders. Hence, while purchasing a plan it is important to be aware of the duration till which the plan won’t actually work for you.
This is not an exhaustive list and has various other factors to determine before making a sound decision. It helps one understand how much coverage one should ideally have. The aim is to ensure that an individual is neither underinsured nor over insured and the policy they’ve selected, caters to their financial goal.
(By Priti Rathi Gupta, Founder of LXME, India’s first financial platform for women)