Buying the right insurance cover is more important than investment products, since catastrophic expenses can easily wipe out all your savings instantly and put you into debts. Hence, it is more crucial that you cover yourself, loved ones and assets with appropriate insurance first and with higher priority when income is limited. In fact, insurance planning has higher priority over investments, home purchase or retirement planning. Take this opportunity to review your insurance policies for any missing links and exposed risks.
- Do you clearly understand the coverages and exclusions applicable for each insurance policy you currently have? Have your insurance agent explained each policy coverage to you recently within the past 12 months?
- Have you updated your insurance protection limits after a significant change in your financial situation or income level?
- Do you have sufficient long term disability insurance coverage in preparation for the event that you cannot work for prolonged periods due to medical conditions?
- Do you have sufficient life insurance coverage for income protection as required for your loved ones and dependents who rely on you for financial assistance?
- Do you have sufficient liability insurance on your home, business and car (including umbrella/excess liability for protecting your assets?
- Do you check whether your insurance carrier have good track records for paying claims and customer service?
- Do you know which type of insurance products are best bought from discount brokers or direct from the insurer’s websites so that you avoid paying commission for agents?
- Do you know when will fee-based insurance advisors be more appropriate?
Do you shop for the cheapest rates when it is time to renew your insurance policies? For certain types of coverage, such as car insurance etc, you are likely to find cheaper deals instead of renewing with your existing insurer unless loyalty discounts are available. However, you are not likely to switch life or medical insurance easily because of the medical examinations or the deterioration of health.
Most people are not familiar with all the above questions, which indicate that they need to lean which are the best insurance cover to buy given their financial situation, especially when it comes to comparing the new long term care insurance policies. Having an honest insurance agent or financial planner to analyze their insurance requirements is highly recommended if you do not know the best way to buy insurance plans for protection.