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Buying insurance? Avoid these 7 mistakes

By Naval Goel
December 11, 2015 13:09 IST
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Here's to being a responsible insurance buyer

Insurance has evolved as a safeguard for people against losses and uncertain circumstances that can occur anytime. It acts like a mechanism which reduces risks to life and property.

Apart from this, insurance adds a lot to the general economic growth of the society by providing stability to individuals as well as corporate and financial institutions. However, sometimes policyholders face financial loss because of some mistakes or misinformation related to purchase of the policy. It is quite common for people to be not aware of the best route of buying a plan and hence they get stuck with something that does not fulfill their needs.

Keeping the same in mind, let us now discuss some of the common mistakes that are made while opting for insurance policies so that you avoid them in the future.

Mistakes that should be avoided

1. Relying on a single insurance company

It has been observed that usually people buy insurance plan from a company which they know for a long period. It is not that the company is not good, but if you compare insurance from other companies too, then you can get a similar type of plan at a lower price as compared to your old insurer.

Basically, insurers collect information and data about you to analyse the likeliness of claims. The procedure to analyse claims can be different from one insurer to another. You can take help from online insurance web aggregators where you can compare between various insurance companies and can get the desired plan.

2. Not using online insurance option

Usually people rely on traditional offline plans and companies and hesitate in trying out e-insurance which has grown rapidly over the years. Buying an insurance plan online helps you save money and time as well. Take the help of any trustworthy IRDA approved insurance web aggregator portal in choosing the right plan which suits your needs.

3. Not understanding the plan

It is vital for you to understand the plan which you are going to buy. Try to gather all the information related to it, spend some time reading through the terms and condition and check with the insurer in case of any doubt. It may be possible that the coverage and related options look confusing, but you have to understand it for your own benefit.

4. Not buying sufficient insurance cover

It is a fact that most people avoid buying insurance as they do not want to spend their money. But you cannot ignore the fact that an insurance plan assists you in several ways by providing financial coverage. Apart from this an insurance plan provides peace of mind to the policyholder.

It is vital to buy an insurance coverage of sufficient amount that can cover your losses if and when they occur. You can't predict the future, but you can save yourself from any adversity that arises with it with the right cover.

5. Forgot renewing the plan

It's a common mistake that people often make with their insurance plan. You need to renew by the stipulated time as stated in the policy document to reap its benefits. You can make changes in your plan as per your requirement but only if you make sure to renew and extend your plan protection cover.

6. Not checking available discounts

Several times people don't look for the available discounts. Insurance companies usually offer discounts on different plans such as health, life insurance, term plan, child plan, pension plan, motor coverage and much more. You must look for it and take advantage of it.

7. Looking out for cheaper plans

Most consumers while buying insurance policies look for a cheap plan. But a cheap plan may not always be good so you must check for the features of the plan instead of focusing on only the premium.

Now that you are aware of the mistakes that people make when buying insurance plans, you should avoid them the next time you start your search for a suitable plan. 

Illustration: Dominic Xavier/

Naval Goel is CEO and Founder,

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Naval Goel