The Six Questions You Need To Ask Before You Commit To Your Insurance Plans

Better Understanding And Making Sure That You Are Covered Enough And With The Right Insurance Plans

If you have concerns for protecting yourself and your family against any unforeseen circumstances like premature death, permanent disability, critical illnesses, huge medical bills or that you just want to make sure that you will have enough money for your retirement...

Getting them planned (partly or all) with Insurance always seem to be a wise choice for most! But there are so many insurance companies with their own versions of benefits and features, so there's always a chance that you may just get the wrong plan or not being covered fully because of limitations.

Therefore, as a consumer, it's good that you need to know what are the questions that you need to ask before commiting to it for the long term. In this article, we will explore what are the six good questions that you can discuss with your Financial Planner before making the commitment to get your insurance plans! Do note that some of the items discussed here may be subjected to terms and condition, so do check them out as well!

1. What Are The Features And Benefits In Terms Of Coverage For This Plan?

Some insurance plans may just offer the very basic of Death Benefit and additional coverage has to be enhanced with the purchase of riders. Therefore you need to ask what are the features and benefits being offered.

Some Common Features:

  • Death
  • Accidental Death
  • Total and Permanent Disability
  • Critical Illnesses
  • Daily Cash Benefit Due to Hospitalization
  • Reimbursements of Hospitalization Bills
  • Waiver of Future Premiums

Some Common Benefits:

  • Lump Sum or Monthly Payout is being given for any claims
  • The Sum Assured is double when there's a claim for accidental death
  • Future Premium is not needed and you are being covered for free if there's onset of a particular illness
  • You are given $YYY per day if you are hospitalized
  • Your medical bill is reimbursed partially or in full

Knowing these can help you to understand what are you really being covered for and what you are not. Knowing what you are not being covered will help you to explore

2. What Are The Features And Benefits In Terms Of Premium Mode For This Plan?

When it comes to paying of premium, you would need to know what are the features and benefits as well. Knowing this well can help you to make better financial decisions.

Some Common Features:

  • Premium Mode in Monthly, Quarterly, Half-Yearly or Yearly
  • Premium Mode in Single Lump Sum
  • The choice to service your regular premium by Cash, Cheque, Auto Deduction from your Bank Account or through a Credit Card
  • The choice to stop paying for a certain number of months because of some temporary financial difficulties. Premiums are deducted through the cash value of the plans, if any.

Some Common Benefits:

  • You get to save more when you go for the Yearly Mode
  • You have the options to convert from Yearly Mode to Monthly Mode or other modes and vice versa.
  • Using a Credit Card can help you to get some insurance premium rebates
  • You get to continue with your plans and be covered as you resolve your temporary financial problems and without the need to surrender your insurance plans

3. What Are The Definitions And Limitations (In Simplest Term) For This Plan?

Do you know that for some form of Critical Illnesses, you may not be paid at all if you do not meet the definitions of the benefits. Therefore you would need to know from your Financial Planner, in the simplest form of understanding, what are the definitions and the criterias you would need to have a valid claim.

Likewise for Limitations, you would need to know because if you have any situations that fall within the Limitations, you will not be able to get any claims at all, no matter how hard you try to fight for it! Limitations are always stated in black and white in the contract, those that are not stated, you can conclude that you are being covered!

4. What Can You Do If You Have Difficulties In Servicing Your Plan?

There may be times that you have difficulties in servicing your insurance plans therefore you will need to know what are the options you can use to benefit you the most without having the need to surrendering the plan.

You must know that if you surrender a plan that's a few years old and re-applying for it, you may be short changed as in the need to pay more or that you are not covered in standard rates.

Examples of Ways To Resolve Your Temporary Financial Difficulties:

  1. Stop paying for a few months and use the cash value, if any, to service the premiums
  2. Take out a cash loan with interest to help resolve your problems
  3. Reduce your initial contributions to the minimum if possible. Do note that you may not be allowed to increase the amount at the later stage because of the potential health risk and the new onset of age

5. How's The Past Performance In Terms Of Bonuses Declaration For The Insurance Company?

Although you cannot depend on past performance as a benchmark for future performance, it's always good to know how the Insurance Company determines its bonuses in good times and bad times. This is useful to know if you are going for conservative saving plans like Endowment Plans.

Insurance companies do have some form of records like policy maturities so you can always ask your Financial Planner to check them out for you. Knowing this can actually help you to make a better comparison which Insurance Companies are overall better for their Endowment Plans.

6. Who Can You Contact When You Need Some Form Of Assistance Other Than Your Financial Planner?

Your Financial Planner cannot be 24/7 operationally ready for you to provide assistance. Therefore, rather than, depending solely on your Financial Planner, it's good to have some contacts like the number or email address to the Customer Service Helpline.

You can always turn to them when you cannot contact your Financial Planner to help you solve any urgent matters.

These are the six questions that you ought to discuss with your Financial Planner but if there's anything else you feel that it's of your concerns and that you have personally came across, it would definitely be good that you bring them out and have them addressed by your Financial Planner.

End of the day, you want to make sure that you are covered enough and with the right type of insurance plans!