11 Common Mistakes To Avoid Before Taking Insurance: Things to Avoid Before Taking Insurance
Accidents, natural calamities as well as future uncertain crises can happen anytime in the present time. When such a crisis occurs, if we do not take any measures for it, it becomes very difficult to recover the financial as well as psychological losses. We take out insurance to protect against these risks. So that we can protect ourselves from such a crisis.
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But, sometimes we unintentionally make some mistakes while taking insurance, which leads the to rejection of our claim by the insurance company at the right time or we don’t get the right compensation. Then we have no other option but to repent. But, don’t worry, let us know about 11 mistakes to avoid before buying insurance? So that it helps you to choose the right insurance policy and your investment is not wasted.
11 common Mistakes to Avoid When Purchasing Insurance
Before buying any insurance policy it is important to understand its terms and conditions. So that you get a fair return on your investment. For that let’s briefly know about 11 mistakes to avoid before buying insurance.
1. Lack Of Understanding About Insurance.
Many people buy insurance without understanding why they want to get insurance before buying it. Therefore, it does not get the benefit for the purpose for which the insurance was taken. For example, you wanted to get insurance to cover hospital expenses. But if you buy life insurance, you will definitely not get the benefit of hospital expenses. So it is important to understand the insurance before taking the insurance.
2. Taking More Than Two Policies For The Same Reason.
Such mistakes are possible if one does not know the type of insurance and its benefits according to the type. Because many people carry more than one insurance policy for the same reason. But, crises do not occur for any single reason. So we should be prepared to avoid all possible dangers. Like health insurance for illness, life insurance for the financial security of the family, auto insurance for the vehicle, etc.
3. Not Researching Your Own Needs.
Many people buy insurance only on the advice of others without examining their own needs. So, you don’t get the benefit at the right time after buying such insurance. Because we don’t need the insurance for which we took it. And your investment is wasted.
4. Providing Incomplete Information.
While taking any insurance, failure to provide complete information about the reason for which you are taking the insurance at the time of purchasing the policy may result in the rejection of the policy claim. Therefore, it is necessary to provide correct information while taking insurance. For example, the claim will not be settled if the vehicle number is given wrongly while taking car insurance.
5. Willful Misrepresentation.
Many people knowingly give wrong information while taking insurance. So that compensation can be obtained from insurance without any loss. For example- buying health insurance with false information. or making false claims by issuing false bills and profiting from the same. But, this is wrong. So you may face difficulties. Which we don’t imagine. So such things should be avoided.
6. Buying Insurance For Tax Relief.
The purpose of buying insurance is to get financial security against future risks. But, many buy insurance to get tax relief. For which false information is given. And then he doesn’t get paid. And the investment is wasted. So avoid taking insurance just for tax benefits.
7. Depending On Your Employer.
Relying on an insurance policy taken out by the employer. Because thousands of employees are insured simultaneously by the employer. And the information given by the employer is given in general terms. Therefore, the terms and conditions given therein may not apply to you. Then your claim can be rejected at the time of need. So instead of depending on the insurance provided by the employer, we should make separate provisions for it.
8. Not Understanding The Terms And Conditions.
Any insurance comes with certain terms and conditions, like the age of the person being taken into account while taking life insurance. Or a person’s medical history comes first while taking health insurance. And you cannot claim under these circumstances or during this period etc. So don’t buy insurance without understanding the terms and conditions.
9. Not Understanding The Limits Of Insurance.
If the policy is taken without understanding its limits while purchasing the policy, you cannot rule out the possibility of getting incomplete compensation in case of a claim. For example- if the insurance policy says that 50% of the loss will be paid and you are not aware of it, then you have to bear 50% of the loss. Therefore, the insurance limits should be understood properly.
10. Not Understanding The Insurance Claims Process.
One should know the complete information about the claim before taking the insurance because if the insurance claim procedure is not known then the time is wasted and then your claim may be rejected on the grounds of expiry of the insurance period. So avoid taking any insurance without understanding its claims before taking it.
11. Not Knowing About Insurance Premium.
You must know that after taking the insurance if the premium is not paid on time, the insurance benefits are not available. Many take insurance without knowing about it. And get free by paying the premium once. Later, if the premium is not paid, the due benefit of that insurance is not available. And the money invested is wasted. So, while taking the insurance, get proper information about its premium and renewal.
Buying insurance according to your needs is best by considering all the above 11 points. Avoid buying insurance just because it’s a tax deduction at someone’s behest or when you don’t need it. We do this so that the above information is useful for you to get the right insurance and avoid mistakes.
Conclusion
The most important thing about insurance is that there are many disadvantages of not having insurance than having insurance. Because crises never come. So we should always be prepared to avoid such sudden crises. So that the future of your family along with your property is safe. And no matter how many troubles may come, we can live a worry-free life. But, if you want to get the full benefit of insurance, you should understand the above 11 points i.e. 11 mistakes to avoid before buying insurance and avoid them.
All the best from me as well as the Thebanksathi.com team to buy the right insurance without making the above 11 mistakes!