Making mistakes is part and parcel of life. But a mistake associated with purchasing insurance is a mistake we cannot afford. Purchasing the wrong insurance policy with insufficient coverage or even overlapping coverage can hurt us financially in the long run. It will cost us precious time and money when it can be avoided altogether.
Below is the list of common mistakes you could make when buying insurance. Let’s check them out.
Most of the time, people will avoid making comparisons for the insurance coverage that they’re going to purchase. It’s such a hassle they said. The conflicting information will only make their insurance decisions harder. So they will most likely go for something similar as recommended by their friends or family. It’s not inherently wrong in choosing the one recommended by the people around you. It may work for them and it covers their needs. But is it suitable for you and your family?
It is advisable for you to not just buy it right away but also do some comparisons and understand the policy before purchasing. Try to compare the coverage, benefits and price that is suitable for you. Comparison shopping can save you some serious bucks in the long run.
Some of you must know at least someone in your circle who works as an insurance agent right? Certain people buy insurance just to support and promote their friends or relatives. That’s a nice thing to do. But it becomes a mistake when the policy that you’re purchasing on the basis of supporting a friend/family member and the likes, doesn’t meet your needs.
Insurance is undeniably worth the cost. Yet, it is better for you to always research further or get a second/third opinion whether the product is suitable for you or not before committing to it.
On the hindsight, good insurance agents or financial advisers are not sole product-peddlers. They have your best interests at heart and will only prescribe to you what you need. Think of them as your personal financial doctor. A good doctor will not prescribe you with just any medicine under the sun but will recommend what’s best for your needs and situation. If your agent is as such, then you are in right hands.
It doesn’t have to be an insurance policy for us to focus on the price. We are always trying to pay less for every possible thing. But you can’t buy insurance the same way you buy your groceries. The cheapest insurance policy might cost you less for now but will cost you more in the future. The cheapest insurance coverage usually has the least benefits. Remember, the main goal when buying insurance is to get sufficient coverage. Penny-pinching does not yield great results in this case.
People often skip reading the important fine print as they find it hard to understand certain insurance terminologies. In most cases, they allow the agent to choose the best insurance plan for them and the process stops there. At this stage, probe further and ask for clarification to the answers you want. If you’ve done some comparison shopping, If you’ve done some comparison shopping, bring it up to your agent and discuss the differences. He or she should be able to give you more insights.
In essence, don’t be afraid to ask difficult questions. It also serves as a litmus test for your agent. If he or she finds it difficult to answer your questions, take it as a cue – you need to be in more capable hands.
Being complacent and not doing your own homework is one of the mistakes that you should avoid at all costs when buying insurance. Take your time and go through the fine prints thoroughly. If you think that the details are complicated, try asking for clarification from your insurance agent. The agent will go through any content you consider difficult to understand. Make sure you are well-informed of what you’re covered and aren’t covered for. This will diminish the chances of getting surprised when filing a claim later on.
This mistake commonly happens when purchasing health insurance. Honesty is the best policy. Or should I change to honesty is the best insurance policy? When purchasing a policy, you are expected to disclose everything that might affect your insurance. You must not lie to get a lower premium as that could lead your claims to be rejected in times of dire need. Being transparent of your pre-existing condition(s) allows your insurer to adjust the plan accordingly. This will save you money and diminish the chances of your claim being declined. Getting a rejection letter from your insurer when you need it the most is not something you want to encounter.
After all, the worst mistake you can make when buying insurance is not buying at all. Insurance is no doubt a necessity in this day and time. Unfortunate events such as major illness, death or loss of property would cost you a lot. Most of the time, these disruptive events come during the most unprecedented moments. For that reason, it is essential to be well-prepared to face these unforeseeable events.
Find out if your insurance coverage is able to meet your financial gaps based on your set goals in just 2 simple steps. Fill in your details with our Discovery Engine on SyncWealth to set your life goals, organise your finances and analyse your needs. Then, upload your existing policies via our proprietary Snap & Sync function to identify any gaps or shortfalls. That will paint you a better picture of your current financial state and how sufficiently protected you are.
Get started towards reaching your financial goals and ensure that you’re adequately covered so that you and your loved ones do not have to worry about tomorrow.
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