8 SMART STEPS FOR BUYING INSURANCE
Purchasing a life insurance policy for yourself and your family is really a hard task. It is considered one of the biggest financial investments a person can ever make.
With all the insurance companies and coverage that is out there, you might not know what to choose from and keeping tabs on how to avoid regretting your decision after shelling out a lot of money. So here are 8 smart steps for buying insurance.
- Choose a company with a good history
First on this list is choosing a company with a good history. This is important because you wouldn’t want to invest in a company that is at risk for bankruptcy.
One smart step is to check how long they’ve been in business. This is because statistically, companies who are older in the business have lesser risk than choosing a newly established company.
If you still are hesitant about it you can also check a company’s financial strength and look for their annual reports that are usually available on the Insurance Commission of the Philippines website. This will also help you check a companies assets and liabilities to give you the ease of mind that they can deliver what they promise.
- Choose the right financial advisor
One of the most important factors that you should consider before investing in insurance is by choosing the right financial advisors. A smart way is to ask your families or friends, who their advisors are and if they recommend them. This is because you would want to minimize the risk and scams that sometimes occur in some agencies.
The relationship you have with your financial advisor should be in a comfortable setting. Life insurance typically lasts you your entire lifetime and it helps deal with hard events that will happen in your life. You are going to be disclosing things to your financial advisor that you don’t normally feel comfortable sharing with anyone else. This is why it is very ideal that you are dealing with someone that you are comfortable with.
- Have an idea of how much coverage you need
Another thing you need to consider before buying insurance is to have an idea of how much coverage you need. One of the rules of thumb in determining your needs it that it should be 5 times your annual income.
- Consider your current finances
Before jumping into such bigger life investments like insurance coverage, you must first ensure that you are not currently in debt or paying hefty sums of bills. Make sure to work with what you currently have on your plate and don’t add more responsibilities that you won’t be able to handle later on.
Evaluate your financial capabilities and weigh your options. You need to make sure that you will be able to handle the finances of investing in any insurance.
- Don’t be afraid to ask questions
There are some clients that get shy and don’t want to make it seem like they don’t know what the insurance is all about. It is completely normal to ask since a lot of people don’t know about this stuff, because this topic wasn’t taught in school. Don’t be afraid to ask questions so you will have a better grasp of what you are getting yourself into.
A smart way to do this is before going to an insurance company or deciding to meet up with a financial advisor make sure to list down all the things you want to ask.
- Takedown notes
Taking down notes will help you remember the coverage a company is offering and better understand the main concepts. This is quite important because you wouldn’t want to forget about the coverages when you get home. One smart way is to compare and jot down the pros and cons of the company and as well as the coverage for you to be able to make informed decisions.
- Don’t sign immediately when you meet
A lot of insurance agents pressure you to get the insurance policy right on the spot. Don’t sign immediately when you meet because you wouldn’t want to rush decisions. The saying “Big decisions need a good night’s sleep” is applicable to such circumstances because you would want to avoid signing in the wrong company. Don’t hesitate to tell the financial advisor that you want to think about it and you are not ready to sign immediately.
- Scout for other companies
Make sure to scout for other companies. This is the best way to see if there is something out there that can provide better coverage for you. Scouting will help you compare the prices and coverage.