No matter whether you are looking for health insurance or income protection, effective insurance planning is a must. There are, unfortunately, so many individuals that are forking out their hard earned cash on a policy that is simply not right for them and their financial situation. With that being said, read on to discover five of the top general insurance buying mistakes you need to avoid.
1. Not being truthful
A lot of people lie on their insurance applications because they fear that if they are honest they will be subject to high premiums. However, if you do this, your policy will be void. Thus, if the insurance company finds out you have not been truthful, which is likely to be the case, you’re essentially just throwing your money down the drain. When the time comes to claim for something, you will not get a payout, and this could leave you in a terrible financial position.
2. Going for a policy with low deductibles
For those of you who are unaware, a deductible is the amount of money you need to pay before your insurer agrees to cover the costs. This can either be paid per annum or per claim, depending on the insurance policy you select. A lot of people are tempted to go for low deductibles. However, if you do this, your policy premiums will rise. Finding the perfect balance is vital.
3. Not knowing your policy
One of the biggest mistakes people make is agreeing to an insurance policy without fully understanding it. Don’t simply overlook complex jargon; you need to ensure you understand every aspect of your policy before you agree to it. Read them carefully.
4. Not asking for discounts
There are various ways you can reduce the cost of your policy, depending on the type of insurance you have taken out and the company you have chosen. From taking a job with a shorter commute to installing a home alarm system, make sure you discover the ways you can qualify for discounts. If you do qualify for any deductions, get in touch the company to inform them. It is unlikely they’re going to offer you a discount if you’ve not mentioned it.
5. Choosing a policy based on price alone
While we do recommend asking for discounts, you should never simply choose an insurance policy because it is the cheapest. This is one of the key rules of insurance buying. If you do this, you are almost certain to end up with a policy that is not right for you and does not provide the level of cover you require.
About the Author:
Nick Smith is a Managing Partner in Taylor Brunswick Group. A Hong Kong-based wealth-management firm that offers expert wealth management advice that will increase the potential to maximize growth for any individual or businesses.