Top 5 things to consider before switching Insurance

Deepak Yohannan
MyInsuranceClub.com

Switching insurance refers to the practice of discontinuing a policy with an existing insurance company and commencing upon a new policy from a different insurance company. There are a number of reasons why people switch insurance. These include poor customer service, unsatisfactory transactions and inconsistent fees and charges. Though at times it is a good idea to switch insurance, you must be very careful before you do so. Often, insurance agents convince you to make a switch even when it is not required. This must be avoided as making unnecessary switches can not only harm your insurance portfolio, it can also leave you with an under-performing insurance plan. Listed below are some points that you must consider before making a switch. Take a look.

1. Calculate the extra costs – Sometimes you may end up paying an extra fee to get a new policy started. This may be due to a combination of cancellation charges (of the old policy), agent fees, medical expenses (if any), and so on.

2. Asses the premium – Many people make a switch because they find new, similar policies with a lower premium value. It is extremely important to note here that you should never switch a policy just because the premium is lesser. Many a time policies charging lesser premiums offer lesser benefits and in the long term you end up paying more to cover your various needs. Thus it is very important to understand the premium structure and what is being offered to you.

3. Consider your age – It is common knowledge that purchasing a policy at a younger age proves to be more beneficial. So you need to be careful and understand what benefits you are getting from the new policy which you are buying at an older age than the previous one. With age, a lot of policy benefits are reduced too. So make a switch only if your new policy promises to cover you in the same manner the old one policy did.

4. Analyze the health of the new insurance company – While it is very safe in India to purchase policies from any insurance provider, you must analyze the health of the insurer you want to get associated with. Apart from its financial standing, you also need to check the customer support system, the frequency at which they offer deals, etc. This is important because if you get stuck with an under-performing insurer, your troubles will only pile up!

5. Speak to your present insurer – Never be hasty in switch insurance. If you are unhappy with the products and services of your current insurer, speak to them and see if you can get a good bargain. Ask them to re-evaluate your policy and make changes. Also, do not get influenced by anyone while making a switch. You must remember that the insurance needs of people vary and just because your friend found a great policy in a new company, you too may not.

Therefore make sure you clearly analyze the pros and cons of switching your insurance policy and only then make a change. If you do not go through this process carefully, you may end up with an extremely unhelpful insurance policy that will soon become a liability to you.

The author is CEO of MyInsuranceClub.com and can be reach at deepak@myinsuranceclub.com