According to the U.S. Census Bureau, . Moreover, LIMRA (a global insurance and financial services research and consulting organisation) says that almost 30 percent households in the country aren’t covered under any life insurance policy. Often, consumers skip buying insurance citing budgetary constraints.
However, if you’ve decided to buy an insurance coverage, then make sure you don’t commit the mistakes discussed below.
Very low deductibles will hike premiums
- A remarkably low deductible will mean you higher premiums. In case of property and casualty insurance even small claims may raise your premiums. The sole purpose of insurance is . Hence, if you can pay $500 or $1,000 yourself initially, then you a lower premium isn't for you.
- You must evaluate your financial condition and the corresponding risk you can afford to assume, prior to making a claim and having yourself compensated by your insurer. So, think of the amount of loss you can pay up on your own before deciding on your deductible.
Unnecessary coverage terms will cost more
- Always have a clear idea about your . For example, seeing a doctor who is in-network to that of your insurer will cost you lesser than if it's not. Purchase medicines covered under the formulary. Find out whether or not your doctor is in-network and the medicines he prescribes are covered under your policy. Or else, you may have to cough up a huge amount of dollars for medical treatments.
- Always go through your insurance policy and keep in touch with your insurance agent if you aren't sure of an item. For instance, many people don’t know that flooding isn't a part of the regular homeowner’s insurance.
Calculate costs first
- Sometimes, comparing multiple insurance policies could be perplexing. However, never settle for an insurance policy just because it has the lowest premium in the town. Make sure you’ve verified the carrier’s reputation and the compensation package it is providing. General rule of thumb says that higher premiums will cost you less in terms of doctor’s consultation fees.
- Private health insurance policies must provide you with clear examples to state the estimates of the costs you’d incur if . Even if some of the examples don’t relate to you, still you can get a clear understanding of what all are on offer and compare different plans to see the amount of copays or coinsurance you’re being asked for.
Insurance isn’t only for the affluents
- A collaborative research named, the 2013 Insurance Barometer Study conducted by LIMRA and the LIFE Foundation revealed that the average American considers life insurance policies to be three times of more costly that they are.
- You can try to get some valuable discounts on insurance policies. It could be health insurance, casualty insurance or property insurance, but any windfall is always a boon for your coffers. These discounts are provided based on the buyer’s household income. Moreover, insurers may provide added incentives for being a meritorious student, a sane driver, AARP member and so on.
Believing all agents as equal
- The truth is, all agents aren’t. You’ll have to work your way up before relying on any one agent’s words. First and foremost, check with state department of insurance whether or not the .
- Second, you may ask for referrals from your friends and relatives. Third, ask questions. Let your agent explain you the policy’s terms and conditions and how is his service going to be helpful.
If you avoid and skimp on having yourself adequately covered as far as health insurance concerned, then your financial security may be at risk. You may opt for life insurance, if you’ve go dependents. Long-term disability insurance can be a good investment, if you lack in major assets to tap.
Raise an emergency fund that worth of three-six month’s living expenses to take care of your short-term disabilities.
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