subject: Avoiding Unnecessary Insurance Policiesinsurance Policies Are Helpful Only If They Are Chosen To Mee [print this page] After paying a couple of premiums if the insured realizes that the insurance policy isnt serving the purpose, theres nothing one can do about it. If they want to cancel the policy before the term is complete, it is a huge loss for the insured as they would lose the entire amount.
It is important to understand the norms of the insurance chosen before going ahead with it. Again the amounts for the insurance varies from each person so do not get boggled by what the agent says. One can even check online forums where discussions are held on the beneficial insurance policies and choice can be made thereafter. Before buying an insurance policy, the insured should ensure they know the purpose of the insurance. For example, life insurance is a requisite but the amount to be insured to be decided on wisely. Too much payment would not be helpful either. One more important thing to note is that insurance is not a form of investment.
It is better to let go of the policy if it does not meeting the requirements. Instead of paying high premiums each month, it is better to close the insurance policy. This will anyways make the person lose the money insured, however at least the high premiums can be saved from getting wasted.
If the premium is paid for around three years and then the insured feels that the policy is not helpful, they can opt to surrender the policy. By doing so, they would get a nominal amount which is lesser than the premium. The rest would be considered as surrender charges.
Converting the insurance into a life plan is another option to stop paying for the policy. This would be possible only after completing three years of premium payment.
If the policy is reaching the maturity and almost all the premiums are paid off, then it is better to pay the rest too. This would at least help in getting the premium that is paid. There will be no surrender charges as the policy has reached the end of its term.
Seeking professional advice on the way to proceed with an insurance policy is also a good option. This should ideally be done at the beginning, however, money can also be saved by acting on it as early as possible.
Insurance policies would be a benefit only if they meet the purpose of the insured. As they are not a form of investment and the premium is higher, care should be taken to understand the insurance policy before signing up for it. Blaming the agent after taking up the policy would be of any help.
by: Harsha Maitra
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