Insurance is one of the best financial choices you can make, however, it should be correctly done. Sadly enough, most individuals complete the process in a hurry, become victims of the marketing tricks, or select the plans without knowing what they actually require. The result? Increased premiums, claims that are denied and financial strain at the most inappropriate time.
To enable you to make the right choice, the following are the top 10 mistakes that people usually make when purchasing an insurance and the way to avoid them.
1. Failure to Know Your real Needs.
The majority of citizens purchase insurance due to the recommendation of a person or a policy appears to be popular. Nevertheless, each individual or family requires different needs based on:
- Age
- Income
- Health conditions
- Financial responsibilities
- Future goals
Choose your requirements before deciding on a plan before choosing a plan. Term insurance may be required by a young professional and comprehensive health coverage by a family. Never buy blindly.
2. Selection of Insurance based on Tax Advantages.
A lot of individuals buy the insurance to save tax under Section 80C. Insurance ought, however, to be a way of securing your financial future, and saving taxes ought to be a bonus rather than the motive to purchase it.
It is impossible to make the wrong policy just because the tax benefits are high.
3. Ignoring the Fine Print
Insurance papers are not brief and simple to understand and disregarding it is one of the biggest mistakes. Exclusions, waiting periods, room rent limits, and co-payment rules have a great impact on your claim experience.
Before finalizing:
- Read the policy brochure
- Understand exclusions
- Check claim settlement regulations.
- To-day a small dose will save you colossal bother to-morrow.
4. Underpricing Requirements on Coverage.
One of the pitfalls is opting to have low coverage in order to reduce the cost of premiums. For example:
- The 2-3 lakh health cover is not usually enough because of the increasing medical bill.
- The life insurance which is less than 1015 times of your annual earnings might not save your family.
Always take coverage that is commensurate to the real world.
5. Not Comparing Policies
A lot of individuals purchase the initial policy that they hear. However, this is a competitive market, other companies have various features, premiums and benefits.
Use comparison sites or use advisors:
- Compare coverage
- Ratio of check claim settlement.
- Look for hidden charges
One fast comparison would enable you to save money but get superior protection.
6. Secrecy around Health Problems during Insurance Purchasing.
There are buyers who conceal the prevailing conditions in an attempt to lower the premium rates but this might subsequently result in the rejection of claim in the future. In the process of making claims, insurance firms will check the medical history.
Be completely honest about:
- Pre-existing diseases
- Smoking or drinking habits
- Past surgeries
It is because it is transparent and your claims are passed without any difficulties.
7. The use of Employer Insurance.
Most of the salaried people are satisfied with the health insurance provided by their company. But what if:
- You change jobs?
- Coverage is cut by your employer?
- You retire?
Employer insurance is a temporary one. It is always advisable to purchase your personal health policy which offers you lifetime cover.
8. Putting off Insurance to a Later Date.
The youths tend to delay insurance purchases believing that they will not require insurance at the present time. But insurance is the most inexpensive when one is young and healthy.
Delaying means:
Higher premiums
More medical tests
High probability of omissions.
Early is best to reap the greatest benefits at the least cost.
9. Failure to Review Policy on an Annual basis.
Life has transformed – income rises, marriage takes place, children are born or sickness sets in. However, lots of individuals do not revise their policies in years.
An annual review helps you:
- Upgrade coverage
- Add riders
- Update nominations
- Remove outdated policies
Periodic examinations make sure that your insurance is in line with your life.
10. Disregard of Riders and Add-On Benefits.
Riders are cheap add-ons that improve your policy. Many customers cannot afford them, and buy without additional protection such as:
- Critical illness cover
- Accidental death benefit
- Disability cover
- Waiver of premium
These extensions make your policy stronger at little additional expense.
Final Thoughts
The process of purchasing insurance is not that complicated, however, it is important to stay out of the pitfalls. Essentially, assess your needs, be truthful, compare policies, and settle on coverage which will actually help you and your family.
An appropriate insurance policy is not a piece of paper but a kind of a financial future guard.
Read More: Best Health Insurance Plans in India 2025: Top 5 Policies You Must Compare Before Buying
YOUTUBE: https://youtube.com/@IBN24NewsNetwork?si=ofbILODmUt20-zC3
Instagram: https://www.instagram.com/ibn24newsnetwork
Facebook: https://www.facebook.com/ibn24newsnetwork/
Twitter: https://x.com/IBN24Network?t=K1A8JK8CUwcgllMRYQNPOw&s=08
