If you are reading this now, you probably have, more or less, a basic understanding of why investing in insurance policies is a very important move. You may be tempted to immediately go out and purchase yourself a plan. But before you do, take in mind the following:
1. Consider What Your Main Priorities Are
Before you buy an insurance, think about your lifestyle (budget included) and what concerns you the most.
- Do you travel often? Then you better get travel insurance.
- Have a car? Then think about applying for auto insurance.
- Your age matters in deciding, too. If you’re in your 20’s, you may want to consider purchasing health insurance first. Around that time, your parents’ insurance coverage may not be applicable to you anymore.
- Do you have a job? If you do, you can obtain health and dental insurance from your employer. You should also apply for disability insurance when you’re already working. It’s usually also provided by your employer, but you may get another one if you want increased coverage – especially if your work is risky.
Of course, the types of policies mentioned here are just examples and suggestions. Everyone’s situation is different and you may get others more suited to your needs.
2. Can the Risk be Reduced Other Than by Insurance?
Not all risks need to be insured. Sometimes, you may be able to avoid it altogether. However, if the price of risk avoidance will make living a full life impossible (e.g. forgoing driving completely to avoid collisions), then it’s better to allow yourself a little bit of the unexpected.
Go back to your list of priorities and think about which are really worth insuring. Weigh the kind of risk. If you think it may be trivial, you can choose to pass it up. An example is pet insurance. While it is a good idea, it’s obviously not for everyone.
3. Take the Time to Compare Policies
Not all policies are created equal. Some are better than others, but keep in mind that cheap doesn’t necessarily mean good or good necessarily cheap.
If you’re worried about your budget, you can use an online calculator to help you see how much you need to set aside regularly for paying the policy premium. Also, different insurance companies may have different packages, so it’s really important to get multiple quotes and to read your policy closely. Some may include really nice (or not too nice) extras.
With the internet, it’s much easier now to compare insurance plans. You have no excuse not to! Remember that careful study can bring you a bigger bang for your buck.
4. Do a Quick Research on the Insurance Company of Your Choice
How sure are you that the insurance company you’re eyeing is trustworthy? It pays to be safe, and at his day and age, it isn’t that hard to at do a simple background check. Simply typing a company name in your search engine can provide a comprehensive list of things you may want to know about the firm.
Most insurance companies have websites now, which can give you more details about their background and service offering. You can also look at what other people are saying about the company in forums. Check reviews, as well as issues that the company may have been involved in. If they made it in the news, chances are you’ll easily find it online.
5. When in Doubt, Consult an Agent
One should not just rely on the Internet for information, consider face time with an insurance agent, who could better explain policies to you.
An insurance agent or broker know their stuff well, and may be able to shed some light on a few more things you may have forgotten to consider. For your information, there are two types of insurance agents:
- Captive Agents: Captive agents represent a single insurance company and are required to only do business with that one company.
- Independent Agent: Independent agents represent multiple companies and work on behalf of the client (not the insurance company) to find the most appropriate policy.
The price you pay for peace of mind is relatively cheap, compared to the losses you may incur if you choose to penny pinch. Finding the insurance policy that fits your life perfectly will help you avoid wasting money.