subject: 10 Most Common Mistakes People Make When Purchasing Insurance in Malaysia - Part 1/3 [print this page] After being highly committed and involved in the insurance industry locally for quite some time now, I would like to share some of my experiences of the most common mistakes people make when purchasing insurances. For those of you who are planning or in the process of getting yourself some coverage, go through my points and please do not repeat the mistake people have been making for ages.
No. 1 : Having inadequate life insurance cover
Firstly, one has to understand the definition and purpose of life insurance policies. Life insurance is never meant for you. It is for your loved ones to carry on with life, without having to downgrade their lifestyle, if you were no more tomorrow. Some people are too concerned about cash bonuses and rather opt for policies that have a lower sum assured that increase with age. Sad to say, if tragedy befalls you tomorrow, your sum assured would not be sufficient to ensure your family still have a roof above their heads.
So, when buying a life policy make sure the immediate sum assured is sufficient. Don't be too concerned about cash bonuses options.
No. 2 : Waiting for a good time to buy insurances
Whatever the reason, the minute you feel the need of a new plan, go and get it. No reason is good enough to delay the purchase of a policy deemed necessary. Moreover, life insurance rates increase with age and as health deteriorates. Some major illnesses, may make you totally ineligible for cover. If you're one of the people who are aitting around and waiting for a good time to buy insurances, let me tell you, it is NOW!
No. 3 : Buying life insurance for children and for those who have no dependents
Again here, the understanding of what exactly is life insurance is very important. (Refer No.1) If you are single and footloose, there is almost no reason why you would require a life policy. Same goes for children. Death of children would definitely be a tragedy but you would not lose any financial support when it occurs. Parents who buy life coverage for their children are making a mistake, unless they have already bought very good medical insurances and education savings plan for the child, too.
Look out for more reasons in our part 2 of this article.
10 Most Common Mistakes People Make When Purchasing Insurance in Malaysia - Part 1/3
By: Manjutha
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