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Things to Consider While Choosing an Insurance Provider

Things to Consider While Choosing an Insurance Provider
June 15
10:06 2021

When it comes to your family and their security, there is nothing that can be left to chance. People often invest in a life insurance product, thinking that their loved ones are now safe hands. Entrusting an insurance provider with your hard-earned money can be difficult. In a country where there are dozens of insurance companies, you need to make a careful choice to safeguard your family’s finances, should something happen to you.

This is where the claim settlement ratio, among other things, steps in.

While there are many term insurance benefits that make life insurance appealing to many people, what good is the insurance if the claim is not honoured by the insurance provider?

Since insurance policies are long-term investment instruments, it is necessary to check all the boxes before committing to them for a lifetime. That being said, here are some things you need to keep in mind when choosing an insurance provider:

Policy prices

While you may not be able to put a price tag on something as valuable as your life, you must aim to get the best value for your money. That is why it is essential to choose an insurance provider who offers you a plan that is suitable for your budget.

An overpriced insurance policy can be problematic to sustain for the long term. All reliable insurance aggregators offer online price comparison tools that enable you to make an objective investment decision.

Products and services

The most common insurance products offered by most companies include permanent life and term life insurance. Many insurers will offer both, and there will be others that specialize in only a few products.

Most people prefer to invest in a term insurance plan because it is simple and cost-effective. But don’t let a low-cost insurance policy be the sole decision-making factor. You need to also look at other things, such as their claim settlement ratio, service quality, range of products, etc.

You should especially steer clear from companies that claim to have specialized in all kinds of life insurance products. It is always better to choose an insurer that specializes in a few. This way, you can be sure that you are working with trained and seasoned professionals who can help you tailor your policy as per your needs.

Reliable insurance providers also offer comprehensive online tools to help you do all of that yourself. So, be sure to check their products and services before investing with them.

Company history

Never take an insurance provider at face value. They may invest heavily in advertising, claiming to be the best in the business, but the best way to assess their reliability is to trust nothing but the numbers. Look at things like the term insurance claim ratio that should be available on the website of the insurance provider.

The claim settlement ratio suggests the number of claims settled in a given year against the number of claims raised by individuals with insurance policies. Remember to only trust a company that has its claim settlement ratio in the high 90s. It is indicative that the insurer successfully settled more than 80-90% of claims. It also means that your family has a very good chance of receiving the death/maturity benefit when the time comes.

Life Insurance Provider

Image Courtesy: Shutterstock

Other than the claim settlement ratio, you must also evaluate the company’s website, network, online presence, etc. These factors can have an impact on the insurer’s work ethic and reliability.

Size of the company

At the end of the day, it all boils down to choosing an insurance company that has a solid market presence. You can assess that by checking their total assets, market share, and growth ratio over the years. These numbers are a sign if the insurer has the ability to meet their financial obligations towards your investments and their ability to honour your claims when you make one.

Service quality

Another crucial factor while choosing an insurance company is its service quality. You must evaluate the company’s attitude towards its potential customers. Are they open to answering all your queries? Do they understand your financial needs? These are just some of the questions you need to ask yourself before making the final call.

Reviews and complaints

While a lot of people often overlook this crucial factor, it is imperative to check the insurance provider’s reviews as well as complaints. Even though a few negative remarks are natural, too many of them can be a warning sign.

Reading reviews of previous clients will help you get a fair idea about the company’s professionalism and how much they are willing to work with their customers. Since insurance and financial investments are long-term decisions, you must only work with those who have decent reviews and fewer complaints.

If you plan to look for the best insurance company, you must start with the claim settlement ratio and then work your way down to other factors. Keep all these points in mind in your quest, and make sure you invest in the right insurance product with the right insurance provider.

The most common insurance products offered by most companies include permanent life and term life insurance. Many insurers will offer both, and there will be others that specialize in only a few products.

Most people prefer to invest in a term insurance plan because it is simple and cost-effective. But don’t let a low-cost insurance policy be the sole decision-making factor. You need to also look at other things, such as their claim settlement ratio, service quality, range of products, etc.

You should especially steer clear from companies that claim to have specialized in all kinds of life insurance products. It is always better to choose an insurer that specializes in a few. This way, you can be sure that you are working with trained and seasoned professionals who can help you tailor your policy as per your needs.

Reliable insurance providers also offer comprehensive online tools to help you do all of that yourself. So, be sure to check their products and services before investing with them.

Company history

Never take an insurance provider at face value. They may invest heavily in advertising, claiming to be the best in the business, but the best way to assess their reliability is to trust nothing but the numbers. Look at things like the term insurance claim ratio that should be available on the website of the insurance provider.

The claim settlement ratio suggests the number of claims settled in a given year against the number of claims raised by individuals with insurance policies. Remember to only trust a company that has its claim settlement ratio in the high 90s. It is indicative that the insurer successfully settled more than 80-90% of claims. It also means that your family has a very good chance of receiving the death/maturity benefit when the time comes.

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