Sometimes, in order to make their insurance portfolio more attractive and voluminous, people unnecessarily pile up insurance policies. While buying insurance policies provides you cover and assurance, it is not always wise to buy every policy that you come across. Often insurance companies advertise their products very wisely and somehow manage to convince you that you need the products urgently.
But before you finalize upon a policy, make sure you assess the features and see exactly what they have on offer and how you would benefit from them. On analysis a lot of people find that they have existing policies that cover a lot of the features of the new policy. So be wise and buy only what you need.
Types of insurance policies
Life insurance policies, car insurance policies and home insurance policies are among the most common types of policies.
Life insurance policy – A life insurance policy covers your life. In other words, if you happen to die within the tenure of the policy, your dependents get a sum of money to help them in your absence. If you happen to survive the policy tenure, you get a sum assured at the end of the policy. So a life insurance policy acts both as a protective tool as well as an investment tool.
But is it mandatory for everyone to purchase a life insurance policy? The answer is no.
Life insurance should only be purchased by those individuals who have dependents. If you are a bachelor and live alone, you don't have to worry about building a fund for your family after your death. Also, if you are already covered by your employer, do not buy another life insurance policy on your own for you may not need two policies of the same kind.
Car insurance policy – While it is compulsory in India to purchase car insurance if you own a car, you have to be very careful while purchasing the policies as there are plenty of available policies. For instance, you should think twice before buying a personal injury protection policy along with your basic motor insurance policy. If you have a comprehensive health insurance policy that covers car accidents, then you wouldn't need this policy additionally.
Home insurance policy – Why would you require a home owner's insurance policy if you do not own a home? While this is a very apparent example, there are other kinds of home insurance policies that you can do without. For instance, you need not require extended warranties on household products for at times, it is cheaper to buy new products than pay up the premiums. So assess the features of the extended warranty based insurance products and you can save up a lot of money.
Unsuspecting customers are often fooled into buying insurance policies they do not need. This is done by the insurance companies with the help of smart agents, deceivingly attractive advertisements and other such misleading propaganda. But you must always remember that every policy available is not useful for you. So you need to know what exactly each policy covers before you make a purchase to avoid overlapping of features.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal
For more articles by Deepak Yohannan, please visit MyInsuranceClub.com