How To Choose The Right Insurance Company?
When it comes to investing in insurance policies, the company matters just as much as the policy. Investing in the right insurance company would mean that you won’t have to worry about receiving the entire coverage amount or missing out on any additional benefits offered.
However, most people tend to develop a tunnel vision when it comes to any form of investment, especially when buying insurance policies. Some choose to focus on just the benefits offered whereas some focus solely on the company’s name without reading the fine line.
Both of these approaches can get you in trouble. Your investment should reflect your long term financial goals, along with providing you with maturity benefits suitable for you and your loved ones. However, the company you choose to invest in also will determine the overall success of your investment.
From tax benefits to market-related cash growth over time, the company’s reputation and its performance in the stock market will guide your investment’s outcome. Therefore, before making any investment choice, here's a list of factors to help you judge the value of an insurance company:
Look beyond the agent
Often people don’t actually do their research on the company they are investing in simply because the agent they hire manages to sweep them off their feet. This charisma can be blinding and you need to watch out for yourself and your investment.
Instead of getting dazzled by sparkling promises and assurance on your investment, a background check is mandatory. Make sure you ask around and find out all you can about the company's reputation.
From claim settlement ratio to the current stock rate for the said company (if your policy promises market-related cash growth) every small detail matters!
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Claim Settlement Ratio
Claim settlement ratio refers to the number of policies claimed by policyholders and their families and the claim settled by the company over a certain period of time.
It is always recommended to opt for insurers, like Aviva for instance, that have a good claim settlement ratio in the industry. This is important because, in the unfortunate case of your absence, you won’t wish for your loved ones to face the additional grief of hitting rock bottom when trying to claim their rightful benefits.
Another thing to consider before making any sort of investment is to make sure that you through the policy document carefully. Often, companies hire independent agents for their sales work. In this case, reading the document becomes even more important so as to match the agent’s promises with the actual legal benefits offered to you by the company.
Company History / Reputation
The company you wish to invest in should be a company you can blindly trust your money with. However, this trust should only be rewarded after doing exhaustive background research on the company and its policies.
A company’s reputation is a reflection of its customer service. Thus, celebrated companies that have been serving their customers with timely settlements and all promised benefits delivered efficiently would prove to be the right way to go! Another parameter to judge a company’ reputation is to compare the number of negative reviews against the positive ones. No company can claim to have just positive results and thus, a company that sounds a little too good on paper, needs a second look.
A few negative reviews can help you understand the potential problems you might face down the line, however, too many negative reviews, obviously, serve as a major red flag.
Look Closely At The Financial Condition
Beyond the elusive promises of a company lies the harsh truth of its financial status. You don’t want to invest a heavy chunk of your savings over a period of time only for the company to claim bankruptcy when it’s time for your claim settlement.
Most policies have a maturity period of at least ten to fifteen years and hence, you need to be absolutely sure about the financial status of the company in the far away future.
Trusted players like Aviva have a very strong financial threshold and thus can be trusted to deliver on their promises even twenty years down the line.
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An insurance company with an extensive list of services and tools available is always a better choice than a company with a limited scope of services.
Additional tools and services would mean that you won’t have to look around to fulfill all your financial needs. So it is recommended that you opt for an insurance company that not only offers all possible insurance policy services but also packs a host of additional tools and services to suit its customers varying needs.
If we take the example of Aviva as one such insurer, who provides services like Will Writing and personalized guidance as per your child’s unique needs in the form of Aviva Kidoscope, we can understand the kind of value add such additional services provide to all.
In a way, you must ideally look for one such company that ensures you have all your requirements met by opting for them!
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