6 Way You Can Evaluate Your Insurance Policy

You can only get the best deal if you compare and select the offers that best suit your needs. Similarly, before subscribing to an insurance policy, you must carry out a thorough comparative analysis of at least a few of them. In the current scheme of things, life insurance is no longer just about death benefits and medical benefits. The policies have evolved; some offer guaranteed returns, while others offer the return of premium after the term-end.

Here are six parameters to evaluate your insurance policy to get the best of it.

  • Cost of the premium amount: The premium amount is the major deciding factor while browsing for an insurance policy. If you go cheap on your premium amount, you will have to compromise a lot. Similarly, if the premium amount is huge, then you might burn a hole through your financial plans. Therefore, you must compare the benefits offered by each policy and weigh them against their premium prices.


  • Coverage of the policy: Coverage means the sum that your family will receive from the insurance policy after its maturity. It is advisable to subscribe to a comprehensive life insurance policy that provides extensive coverage and offers rider options. Through rider options, you can change a generic life insurance policy into a life cum investment insurance. ULIP plan or Unit Linked Insurance Plan will also offer similar benefits. ULIP charges are also slightly different as one part is invested, and the other part provides life cover. You must look through a few such policies before deciding on one.


  • Convenience: Buying through an agent might be a nuisance for you since agents always try to shove a particular type of policy. If you are going through an agent, chances are they will not offer you multiple policies to compare in the first place. Hence, buying insurance through an online medium has been picking up lately. For example, every single Tata AIA policy is listed on their website and can be readily compared and bought online with a few simple steps. Automation of the premium payment will only add to your convenience.


  • Company’s record: An easy way to measure the worth of an insurance policy is by going through the company’s settlement record. If you see a healthy number of settlements by the company, be assured that the policy will be worth the investment. A good company will disburse the amount within 30 days after the maturity of the amount. IRDAI ensures that all the settlement records are made available to the customers. It is done to maintain transparency.


  • Customer service management: A smooth, functioning customer service department makes the difference between a good insurance company and a great one. It is the responsibility of the insurance company to set up 24/7 customer service to ensure ease of comparing and addressing the doubts of the customer. A relationship manager and a decent email support system will also do the trick. You can be assured that the company is just a call away whenever you have a problem regarding your policy.

 Credentials of your policy provider: If you invest your money in a ULIP plan or an investment insurance plan, you need to be aware of the company’s credentials. Risk evaluation in insurance is important to protect your investment from the volatility of the market conditions. This is also an important factor to be considered while carrying out the evaluation of a life insurance company. It is not about the company that offers the highest return in a bull market but about the insurance company that offers consistent returns throughout the tenure of the policy.

Use the above 6 Cs as a checklist while you are evaluating your pre-existing policy or comparing new policies. The factors mentioned above will help you identify the policy that will add value to your life and personal net worth.

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