How do you select an insurance policy?


Quick Answer

When choosing an insurance policy, factors such as current and forecasted income, cost-benefit ratio and what the insurance company is offering should be put into consideration. Though getting an insurance cover offers an opportunity for a better financial future, selecting the right one is just as important, states NDTV Profit.

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Full Answer

Factors that influence the ability to pay for insurance include age, medical status and future financial plans among others. Basing choice of insurance policy on income has no other alternative. Taking the benefits that comes with the payment into account also helps when selecting a policy, explains NDTV Profit. Before the selection is made, it is wise to ensure there is a balance between benefits and cost of the insurance. A cover should include all dependants and medical needs.

An individual’s needs also influence the choice of policy; some choose a policy that only offers cover, while others go for a policy that comes as investment as well. Among the most common options people go for include term insurance, unit-linked insurance plan, endowment policy and money-back policy, states NDTV Profit.

During the process of selecting a policy, it is advisable to get different quotes to know what is available. Agents and companies that cannot offer full explanation of policies should be avoided. Avoid companies and agents that intimidate and bully clients into buying what they do not understand, according to Forbes.

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