Insurance is a vital part of financial planning, as it provides protection and peace of mind in case of unexpected events that may cause financial losses or hardships. However, choosing an insurance policy that suits you can be challenging, as there are many types of policies, features, benefits and costs to consider. In this article, we will share some tips on how to choose an insurance policy that suits you in UK 2023.
Know Your Needs
The first step in choosing an insurance policy is to know your needs and goals. What are you looking for in an insurance policy? What are the risks that you want to cover? How much coverage do you need? How much can you afford to pay for the premiums? These are some of the questions that you need to answer before you start looking for an insurance policy.
For example, if you want to buy a life insurance policy, you need to decide whether you want a term life policy or a whole life policy. A term life policy provides coverage for a fixed period of time, such as 10, 20 or 30 years, and pays out a lump sum to your beneficiaries if you die within that period. A whole life policy provides coverage for your entire life, as long as you pay the premiums, and also accumulates cash value that you can borrow or withdraw. A term life policy is usually cheaper than a whole life policy, but it does not offer any savings or investment component.
Similarly, if you want to buy a health insurance policy, you need to decide whether you want a basic plan that covers only hospitalisation and emergency expenses, or a comprehensive plan that covers outpatient care, dental care, maternity care, etc. A basic plan is usually cheaper than a comprehensive plan, but it may not cover all your medical needs.
Compare the Plans
Once you know your needs and goals, you need to compare the plans from different insurance companies in terms of the sum insured, inclusions and exclusions, add-ons, claim process, deductibles, co-payments, etc. Choose a plan that is cost-effective for the premium you pay and meets your requirements.
For example, if you want to buy a car insurance policy, you need to compare the plans from different insurers in terms of the type of coverage (third-party liability or comprehensive), the amount of coverage (the maximum amount that the insurer will pay for damages or injuries), the add-ons (such as breakdown cover, personal accident cover, legal expenses cover, etc.), the claim process (how easy and fast it is to file and settle a claim), the deductibles (the amount that you have to pay before the insurer pays the rest), the co-payments (the percentage of the claim amount that you have to share with the insurer), etc.
You can use online comparison tools or websites to compare the plans from different insurers and get quotes based on your details and preferences. You can also read reviews and ratings from other customers or experts to get an idea of the quality and reputation of the insurers.
Ask About the Add-ons
Add-ons or riders are additional coverage options that you can purchase by paying an extra premium. They widen the scope of the policy and provide coverage against specific damages or events that are not included in your usual plan. For example, you can buy a critical illness rider for your life insurance policy that will pay out a lump sum if you are diagnosed with a specified critical illness, such as cancer, heart attack or stroke. This can help you cover your medical expenses and other financial obligations.
You should ask the insurer about the add-ons offered and choose the ones that best suit your needs and budget. However, you should not buy unnecessary or irrelevant add-ons that may increase your premium without adding much value to your policy.
Check the Claim Process
One of the main objectives of buying an insurance policy is to get immediate financial assistance in case of an unforeseen event. So, it is important that you choose an insurer that has an easy and quick claim process. You don’t want to go through a complicated procedure to get compensation for your losses.
You should check the claim settlement ratio of the insurer, which is the percentage of claims settled by the insurer out of the total claims received. A high claim settlement ratio indicates that the insurer is reliable and efficient in settling claims. You should also check the average claim settlement time of the insurer, which is the time taken by the insurer to settle a claim from the date of receipt. A short claim settlement time indicates that the insurer is prompt and responsive in settling claims.
You should also check the claim procedure of the insurer, which is the steps that you have to follow to file and settle a claim. You should look for an insurer that has a simple and hassle-free claim procedure, such as online filing, minimal documentation, 24/7 customer support, etc.
Review Your Policy Periodically
Your insurance needs may change over time due to various reasons, such as changes in income, family size, lifestyle, health condition, etc. So, it is advisable that you review your policy periodically and make necessary changes or upgrades to ensure that it remains relevant and adequate for your current situation.
You should also check the renewal terms and conditions of your policy, such as the premium amount, the coverage amount, the exclusions, the add-ons, etc. You should look for an insurer that offers a fair and transparent renewal process, such as no hidden charges, no increase in premium due to age or health status, no reduction in coverage due to claims history, etc.
You should also check the cancellation terms and conditions of your policy, such as the cancellation fee, the refund amount, the notice period, etc. You should look for an insurer that offers a flexible and convenient cancellation process, such as no cancellation fee, full or partial refund of premium, online cancellation, etc.
Choosing an insurance policy that suits you is not a one-time decision, but a continuous process that requires careful research and comparison. You should consider your needs, goals, budget and preferences before buying an insurance policy. You should also compare the plans from different insurers and choose the one that offers the best value for money. You should also ask about the add-ons, check the claim process and review your policy periodically to ensure that it meets your changing needs. By following these tips, you can choose an insurance policy that suits you in UK 2023.