Tips For Getting The Best Deal
- Take up insurance sooner rather than later
- 14-day free look period
- Enhancing your policy with riders
- Choose a plan with guaranteed renewal
- No need to buy several medical expense policies
It is advisable to buy insurance when you are still young and healthy. Furthermore, premiums will be lower than when you are older or when a health condition sets in. For health insurance products, some are not available to people over a certain age or with an existing illness.
All insurance companies grant a “14-day free look period”. It starts from the date of you receiving your policy document. During this period, you should review your policy carefully to see if it meets your needs. If you decide not to keep it, give the company written notice of cancellation, the company will terminate your policy and provide the appropriate refund.
Note that you may be charged for fees incurred such as medical examination expenses and, if you had bought an investment-linked plan, you may need to pay for investment losses if the price of the units falls.
Instead of cancelling your existing policy and risk incurring new charges and fees, you can consider attaching policy riders to enhance your insurance policy.
A policy rider is an addition to an existing insurance policy that provides additional coverage.
There are many insurance riders to choose from.
For example, you can take a rider that offers:
- Disability waiver of premium, which allows you to stop paying premiums for a policy if you become disabled for a sustained period of time;
- Accidental death benefit, which pays you additional benefit in the event of a death resulting from an accident;
- Family income benefit, which guarantees that your family will continue to receive your monthly income if you die prematurely.
You should take the time to evaluate whether a policy rider offers additional protection that you deem is worth the extra expense.
Rather than buy a product that gives insurers the right to cancel your cover in writing before your plan is due for renewal, opt for one that guarantees your cover will stay in force as long as your premiums are paid on time. However, do note that some products allow insurers to change the benefits, premium rates or other terms and conditions when the plans are due for renewal.
With medical expense insurance, the total benefit you will get is limited to your actual expenses. Hence, there is no need to take up more than one medical expense policy.
Important Tip: The fact-find process
Buying an insurance plan can be a mind boggling process. That is why you need the help of a professional Financial Adviser (FA) representative who will identify your needs with a 6-stage sales advisory “fact-find” process:
Stage 1: Establish and define client-representative relationship
Your FA representative will meet up with you and explain the purpose of the meeting. He will introduce his company, disclose his status, and provide clarity on his role and the types of financial advisory services and investment products he can offer.
Stage 2: Gather data, define goals
Before recommending an insurance policy to you, your FA representative will first need to identify and analyse your financial needs, starting with a ‘know your client’ (fact-find form).
He will establish which life stage you are at, for example, a student, newly married, planning a family, nearing retirement, and so on. He will gather all relevant financial information to understand your needs and determine your concerns and financial goals. He will also need to ascertain your attitude to risk.
Your FA representative relies on the information you have provided to assess your needs. To assist him in giving you the best advice, it is important to share as much information as possible regarding your financial circumstance.
You will need to decide what kind of advice you would like to have:
a) Full advice
For best results, you should take full advice and provide complete and accurate information. With full advice, your FA representative will be able to thoroughly analyse your needs and make recommendations that best meet your goals.
b) Partial advice
With partial advice, your FA representative can only give you advice based on limited information you have given and so you may risk financially committing yourself to a product that may not be appropriate for you. As a result, you must assess how appropriate his recommendations are to your needs, aims and financial situation.
c) Product advice
With product advice, your FA representative can only give you specific advice on a particular product to meet your specific needs.
d) No advice
You do not want to receive any advice from your FA representative. You want your adviser to simply carry out your request.
Stage 3: Analyse and evaluate financial status
Your FA representative will analyse all information gathered and evaluate your financial situation in relation to your objectives.
The analysis and evaluation of the information provided form the basis on which recommendations are made.
Stage 4: Develop and present recommendations
Your FA representative will explore relevant alternatives to meet your financial objectives. He will design solutions and provide options that can reasonably meet those objectives. He will explain to you the basis of his recommendation, as well as the costs and charges involved, and the features of the recommended products.
Your FA representative is required to present you a proper Recommendation in writing. A copy of the Fact-find form, Needs Analysis, and Recommendations will be given to you.
Stage 5: Implement recommendations
You should evaluate the advice and Recommendations given by your FA representative, and select the appropriate policy or policies for yourself.
Stage 6: Review with client periodically
Your FA representative will contact you to conduct a review of your policy or policies. Monitoring them ensures that you are achieving your financial objectives. There is no hard and fast rule as to when a review should be done. The normal practice is to monitor and conduct a review annually.
Another important point to remember is that your relationship with your FA representative is a long-term one. Your insurance coverage and investment portfolio should be reviewed periodically to ensure that they are aligned with your needs. Thus, it is necessary to make contact with him when changes occur, such as when you purchase a home or have children.
