5 Questions You Need to Ask Your Insurance Advisor
The insurance marketplace has undergone a tremendous change with online insurance plans available at your fingertips. However, understanding the complete terms and conditions of the plan proves to be a challenge for many. Therefore, people rely on their insurance agents when buying a policy.
Who are insurance agents?
Insurance agents are licensed professionals who have the required knowledge about insurance plans and how they work. They understand the nitty-gritty of insurance that you might find too difficult to grasp. Thus, they can help you find the right insurance policy with their expertise, depending on your coverage needs. Though insurance agents provide their expertise, you also need to understand the plan you are buying.
When investing in a savings insurance plan, you should ask your insurance agent about all the important aspects of the plan. Here are 5 life insurance questions to ask an agent -
5 questions for insurance agents
1. Is the insurance agent licensed?
Insurance agents are required to pass an insurance exam conducted by the Insurance Regulatory and Development Authority of India (IRDAI). Clearing this examination gives them a license to sell insurance policies. Only licensed agents are authorized to sell insurance plans to customers. So, the first thing you should ask is whether your insurance agent has an IRDAI license. Agents are required to produce their insurance license to their clients when asked. You can check the agent’s license before you buy an insurance policy from him/her.
Pro tip: Always buy insurance from licensed agents. Tata AIA Life Insurance’s insurance agents are licensed professionals who also have the expertise to help you buy the right plan. You can get in touch with these agents for their knowledge and expertise.
2. What are your financial needs?
A professional and an informed insurance agent should conduct a fact-finding analysis to determine your financial needs, both past and present. This fact-finding exercise involves inquiring into your assets, liabilities, incomes, expenses, and financial goals. Based on these findings, the insurance agent assesses which insurance plans would suit your requirements.
So, you should ask your agent what, according to him, are your financial needs. This will help you assess if your agent understands your financial requirements and understand if he is knowledgeable enough to suggest plans to fulfill such requirements.
Pro tip: Do not mention your financial needs. Let the agent find out what you need so that he knows which plans to suggest.
3. Would the suggested insurance policy suit your financial needs?
After the insurance agent assesses your financial needs and outlines them, he tells you the insurance policies that would fulfill the identified needs. For example, if you have a child and want to create a financial corpus for his/her future, the agent would recommend investing in a child insurance plan. Similarly, if you are afraid of critical illnesses causing a financial strain, the agent would ask you to opt for a critical illness benefit rider* in your policy for financial security.
So, when an agent suggests an insurance policy to you, ask him whether the policy would meet your financial needs. If yes, ask him how.
Pro tip: There are different types of life insurance plans for different financial needs. Check whether the agent has suggested the right plan that matches your needs.
4. What are the policy terms and conditions that you should keep in mind?
Insurance policies are technical contracts that list down the terms and conditions of coverage. Moreover, the plan benefits also depend on these terms and conditions. Hence, you should understand all the relevant terms and conditions under the policy you are considering buying.
Ask your agent to explain the terms and conditions in as much detail as possible. If you do not understand the technical terms, ask your agent to simplify them and understand the scope of coverage, the premium you need to pay and for how long, and the benefits that the plan promises. Particular attention should be given to policy exclusions, i.e., instances in which the claim will not be paid.
Pro tip: Go through the fine print of the policy before you buy it. If you don't understand something or have queries, ask your agent to clarify your doubts.
5. What does this product offer that other products do not?
Insurance agents are tied to one insurance company unless they are a broker. As such, they can sell plans that their company offers. So, when an agent tells you why you should invest in an insurance policy recommended by him, ask him for a comparative analysis of the policy vis-a-vis other policies. Ask him about the USP of the plan he is selling that distinguishes it from the rest. This would help you compare the plan with those available in the market and make an informed choice.
Pro tip: Always compare the coverage vis-a-vis the premium, not the premium alone. If a policy has a higher premium, it might also offer better coverage benefits. So, ask your agent to show you why the policy he is selling is better on both the coverage and the premium aspects.
Ever heard of the line ‘Buyer beware’? It is applicable when buying insurance plans too.
Though insurance agents are knowledgeable and experts in their field, you must do your due diligence. Buying the right insurance policy is as much your job as it is your agent’s. You should fully understand the policy being offered by the agent and why it is right for you. Knowledge of the policy’s technicalities is also important so that you enjoy the maximum benefits without overlooking any coverage conditions. After you get satisfactory answers to these questions, buy the insurance policy that your insurance agent sells you. Knowledge is, after all, a powerful thing, isn’t it!