Things You Need To Know When Buying An Insurance Policy
The primary purpose of buying insurance is to safeguard anything by putting a monetary value on it. This simple rule holds true for every type of insurance, be it against property damage, or motor insurance, or even life insurance.
However, there are several factors that need careful attention when buying an insurance policy. Any neglect in these decisions can affect the cover offered by the insurance policy.
Type of Profession
To a large extent the type of insurance policy and the cover offered depends on the profession of the insured. Of course, there are professions that pose a higher risk to the life of the applicant than others. Therefore, the premium required to be paid by the applicant is also higher than usual. For example, oil rig workers face a constant threat to their lives from fire and explosions. Insurance policies for such professionals consider higher possibilities of claims and thus charge more premium from the applicants.
Existing Health Conditions
Another factor that buyers must not neglect is specifying any existing medical condition to the insurance company. Experts at https://simplelifeinsure.com/ explain that insurance companies consider life-threatening health conditions before offering a policy. For example, if a person has a history of severe heart conditions than most probably insurers would refrain from offering a policy cover, at all. Moreover, if the applicants fail to do so, they may end up without getting any compensation from the insurer.
Age of the Applicant
The age of the applicant plays a vital role when buying life insurance, in particular. But, age also affects other insurance policies as well. For example, motor insurance also considers the age of the owner when offering insurance cover. The reason for this limit is the higher risk of the insured claiming for compensation. For example, the normal life expectancy of humans is around 70 years. Someone, who is already past 60 years of age, would have a higher chance of claiming the insurance policy, long before it matures. It would risk the insurer of paying the cover, which would leave the insurance company at loss.
Number of Dependants & Nominees
The insurance companies also consider the number of nominees and dependants that a person buying a policy has. Simply, more number of dependants would strengthen the case in favor of the insured. Moreover, when it comes to the nominees of a policy, the insurer has to pay if something happens to the nominees. In both cases, the insurance company considers the financial risk involved. Of course, neither the insurance company nor the applicant would wish to be at loss.
Buying an insurance policy is easier said than done. In fact, the applicants must consider the factors that can affect their claim. And of course, they wouldn’t wish to receive a rejection for their claim when they have been paying their premiums regularly. Therefore, it is important to consider the factors that can affect the premium paid, and the compensation received if any claim is to be made by the policy-holder.
