{"id":3998,"date":"2020-07-29T11:47:15","date_gmt":"2020-07-29T03:17:15","guid":{"rendered":"https:\/\/people.utm.my\/razman-ayop\/?p=3998"},"modified":"2020-07-29T11:47:15","modified_gmt":"2020-07-29T03:17:15","slug":"4-considerations-before-buying-insurance","status":"publish","type":"post","link":"https:\/\/people.utm.my\/razman-ayop\/4-considerations-before-buying-insurance\/","title":{"rendered":"4 considerations before buying insurance"},"content":{"rendered":"
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It is important to make sure an insurance policy fits both one\u2019s needs and the budget. (Rawpixel pic)<\/figcaption><\/figure>\n

It is important to make sure an insurance policy covers today\u2019s needs and the needs of the future, and does not break the bank.<\/p>\n

Here are a few points to ponder before signing on the dotted line.<\/p>\n

1. Can you afford it?<\/strong><\/p>\n

When it comes to buying insurance, most people tend to think more is better, which is true to an extent.<\/p>\n

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More coverage means more protection, which means more peace of mind, right? Well, only if one can afford to keep up with the premiums.<\/p>\n

An insurance policy is a long-term commitment, and life policies can stretch over decades. A lot can happen over a long time and a premium that is affordable now may not be what you can afford five years down the road.<\/p>\n

A balance between getting enough coverage to protect the individual and their dependents and the affordability of the premiums must be struck.<\/p>\n

A good way to measure the right amount of cover is by working out one\u2019s current financial expenses and adding in any additional expenses that may be incurred in the event of serious illness, or asking how much income dependents would need should one die.<\/p>\n

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Remember, failure to pay premiums could result in the policy lapsing. More cover is great, but less cover is ultimately better than no cover at all.<\/p>\n

2. Does this type of insurance suit you?<\/strong><\/p>\n

As people go through the different stages in their lives, financial goals change.<\/p>\n

A young unwed couple may want to save for marriage, parents with a baby want to save for the child\u2019s education and general protection and, as people age, they start to think about retirement and how much will be needed at that point.<\/p>\n

Whatever policy is chosen, it should have a structure that reflects one\u2019s financial goals.<\/p>\n

For example, the parents of a newborn, would want to cover the rising costs of education and protect the child in the event they fall critically ill or die.<\/p>\n

In cases like this, one should purchase endowment policies with an unlockable value after a certain period of time instead of, say, whole life insurance. This helps save for the child\u2019s education while providing life insurance as well.<\/p>\n

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Consider the stage of life you are at currently and tailor-make your insurance policy for it. (Rawpixel pic)<\/figcaption><\/figure>\n

3. Do you understand the terms and conditions?<\/strong><\/p>\n

It is a common gripe that insurance companies do not pay out or pay much less than they are supposed to. Unfortunately, this is as much a problem with the insured as it is the insurance company.<\/p>\n

A consumer must pay attention to policy exclusions. Exclusions are conditions whereby benefits would not be paid out, so it is extremely important to pay attention to them.<\/p>\n

Common exclusions can include pre-existing conditions or outpatient medical services, which means the benefits may not be paid if the individual already had a condition before purchasing the policy and the policy may not cover outpatient treatment.<\/p>\n

Make it a point to read the exclusions, understand the deductibles, claim and age limits.<\/p>\n

On the insurer\u2019s end there are calls to simplify the language to make the policy easier to understand.<\/p>\n

4. Are you comfortable with your financial adviser?<\/strong><\/p>\n

Insurance is part of a person\u2019s financial plan, a plan that will be followed throughout one\u2019s life.<\/p>\n

To be able to entrust one\u2019s financial future to a financial adviser to guide one, there must be a high level of trust. Whoever one chooses, they should always make one feel comfortable.<\/p>\n

The ideal adviser would:<\/p>\n

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