Wednesday, January 30, 2013

TRUTHS and MYTHS About Insurance Policies

Let's face it: Life is uncertain. So both the young and old have equal chance of not making it to the next second. We cannot be too much in control; the catch in life is that we don't know when we are breathing on our last breath.

That's sad, yes? Now insurance comes in the way. Now there are many types of insurance.

Let's be clear. I'm not selling insurance plans here. But I want to highlight the importance of having insurance plans. For once in your life, purchasing insurance plans can be your best decision yet.

When signing up for a plan though, you may be find it hard to decide which to choose as there are many plans and policies offered to you. If you are not familiar with them, you cannot solely trust the insurance brokers for what they are promoting.

Of course, these agents will tend to market their own life insurance policies. With this, you are still uncertain on the guarantees that you will get the best insurance policies that fit you.

In this article, we will talk about the most common misconceptions on insurance conditions and claims. Know the truth and myths about insurance policies before it's late:

1. MYTH: The cost of life insurance is seven times the present income of the person.
TRUTH: In calculating for the final life insurance amount, insurance companies would have different baselines. Actually, the total amount of the insurance premium would vary accordingly to your needs and also the dependents that will be supported when the insurance is utilized. So before concluding the amount to pay, a good rule of thumb is to find all the factors leading to the insurance amount and ask your local legal sector for advice.

2. MYTH: Life insurance policies cover ALL bills and funeral charges after the death of the owner of the insurance.
TRUTH: This is only true to those insurance policies which actually have that statement. Unless declared or explicitly written, confirm about this portion in the life insurance policies and know the coverage of your protection. Also consider the expenses of your dependents after in case of the eventuality.

3. MYTH: All car damages will all be taken care of when you have an auto insurance plan.
TRUTH: You can only get reimbursed if you have shown proof of the damage and you can receive as much insurance money as quoted or estimated by the car insurance company. So your takeaways here are to take a picture or video of the damages and the actual scenario and be as honest as possible. If they found that you are lying at some point, your insurance claim will be denied and this will also impact your policy rate.

4. MYTH: All home damages will all be taken care of when you have a home insurance plan.
TRUTH: Just like the car insurance, you will not have a guarantee that the insurance company will be held responsible in paying out for all the costs of the damage in your house.
First thing to do after the damage has been done is to take a picture of the mess and immediately report it to the insurance company. Explaining the actual losses vividly will also help your insurer get a more accurate approximation of the insurance claim for the damage.

After the insurance company has been notified, you can then make your own repairs or have them fixed by other teams. However, do make sure to track all your expenses by collecting receipts to show to the insurer. These expenses should be included as part of the indemnification.

On another side, it's better if you can wait unti the insurer gets to your home and see the damages through his own eyes. Taking photos is okay, but looking at how disastrous the damage is in reality is evidently way better.

5. MYTH: You can get as much benefits as stated in the coverage, as needed with your insurance plan when emergency comes.
TRUTH: In normal scenario, the above statement applies as a truth. However, there may be special cases where insurers suspends and adjusts the insurance policies you have signed up on. For example, they have an early detection that horrible floods will visit your area. If they are cruel, they will take this advance warning as a signal to take out some passages in the insurance policy to their advantage. To avoid such instance, review the policy adjustments related to disasters and clarify them with the insurance company.

End Notes

Just like life, signing up for an insurance policy has its own uncertainties. To have proper knowledge on these policies, take the time to carefully review all terms and conditions of your insurance plan. It's good to be a doubting Thomas so you can have insurance agents or the company reveal all hidden statements that could backfire you in the future.