Over the years, the insurance sector has changed dramatically, with online insurance products now available at your fingertips. However, many people struggle to understand the full terms and limitations of term insurance plans. As a result, individuals rely on their insurance agents when purchasing coverage. If you are approaching your insurance agent or calling up the customer care of an insurance company for insurance advice, here are the essential questions you should ask.
Who are the insurance agents?
Insurance agents are qualified experts who understand insurance plans, how they work and can help their customers find the best term insurance plan. They understand the intricacies of insurance that you may find difficult to comprehend. With their knowledge, they can help you choose the correct insurance policy based on your coverage requirements. Though insurance agents offer their experience, you must also comprehend the plan you are purchasing.
Five Questions for Insurance Agents
- Is the insurance agent licensed?:Insurance agents must pass an insurance test administered by the Insurance Regulatory and Development Authority of India (IRDAI). After passing this exam, they will be licensed to offer term insurance plans or any other insurance plans for that matter. Only licensed agents can sell insurance plans to customers. So, the first question you should ask is whether your insurance agent holds an IRDAI license. Agents are required to provide their insurance license to their consumers when questioned. You can check the agent’s license before purchasing an insurance coverage from him or her.
- What are your financial needs?:An experienced and knowledgeable insurance agent should do a fact-finding investigation to assess your financial requirements, both past and present. This fact-finding approach entails understanding your assets, liabilities, income, expenses, and financial objectives. Based on these findings, the insurance agent determines which one is the best term insurance plan . So, ask your agent what s/he thinks your financial needs are. This will assist you in determining whether your agent knows your financial requirements and is competent enough to recommend plans to meet those objectives.
- Would the suggested insurance policy meet your financial needs?:After assessing and outlining your financial needs, the insurance agent recommends insurance coverage whether it is term insurance plans or any other plan that will meet those needs. For example, if you have a child and want to set up money for his or her future, the agent would advise you to invest in a child insurance plan. Similarly, if you are concerned about critical diseases causing financial pressure, the agent will advise you to include a critical illness benefit rider in your policy to provide financial protection. So, when an agent recommends the best term insurance plan to you, ask him or her if it meets your financial requirements. If so, ask him how.
- What policy terms and conditions should you bear in mind?:Insurance policies are technical contracts outlining the terms and conditions of coverage. Furthermore, the plan benefits are dependent on these terms and circumstances. As a result, you should comprehend all of the applicable terms and conditions of the policy you are considering purchasing.
Ask your representative to go over the terms and conditions in as much detail as possible. If you don’t understand the technical words, ask your agent to explain them so you can comprehend the scope of coverage, the premium you’ll have to pay and how long it will last, and the benefits promised by the plan. Particular attention should be made to policy exclusions, which are cases in which the claim will not be paid. In other words, read the fine print of the policy before purchasing it. If you don’t understand something or have questions, ask your agent to clarify.
- What makes this product unique in comparison to others?: Unless they are brokers, insurance agents are only affiliated with one insurance firm. As a result, they can sell the plans that their company provides. So, when an agent tells you why you should buy term insurance plans, ask him to provide a comparative study of the policy vs comparable products. Enquire about the USP of the plan s/he is selling that sets it apart from the competition. This will allow you to compare the plan to those available on the market and make an informed decision.
Always compare the coverage to the price, not the premium itself to find a best term insurance policy. If the best term insurance plan for 1crore has a higher premium, it may provide better coverage advantages. So, ask your salesperson to explain to you why the policy he is offering is better in terms of both coverage and premium.
Ever heard the phrase ‘Buyer beware’? It is also applicable while purchasing insurance products.
Even though insurance agents are experienced and specialists in their area, you must exercise caution. Choosing the correct insurance policy is as much your responsibility as your agent’s. You should fully comprehend the coverage given by the agent and why it is suitable for you. Knowledge of the term insurance plans is also required to ensure that you receive the best term insurance plan without overlooking any coverage conditions. Once you’ve received appropriate answers to these questions, purchase the insurance policy recommended by your insurance agent.