The don’t s of Life Insurance
You may have been a victim of chasing after your insurance compensation. Or you may know someone who has been. Talk of endless appointments to ‘investigate’ your cover’s anomaly, court cases after another—until your file papers yellow with age.
Not mentioning your lawyer’s fees, physical and mental fatigue. And with the beckoning of many other responsibilities, you abandon the pursuit for your reimbursement You are left with a bitter taste in your mouth whenever you hear the word insurance.
Some of the dont’s are common sense, while others may never have crossed your mind. The effects of both can take you through the above rat-race. That is why whenever the enthusiastic insurance sales people approach you, you need to have your game in order.
Don’t lie on the application
Some of the most common things that people lie about on their application are tobacco and alcohol usage. If the insurance company gets to find out that you lied, you may be denied coverage right from the beginning. If the information is found to be untrue when you pass on, your family may not get the death benefit from the insurance company. Don’t cost your family a secure lifestyle because you weren’t honest.
Don’t get too little coverage
This is of course not asking you to pay premiums of millions of shillings—if you can’t afford that, but you need to invest a figure that will make you more secure. Some experts recommend eight to ten times your annual salary as the ultimate target. If your spouse is not employed, you may need more. However, if you have another policy through your employer, you may need less.
Don’t cash out your policy
While it may be tempting to cash out your life insurance policy during hard times, it is not recommended—unless there is no alternative. If you have had your policy for quite some time, you will be losing a considerable amount of the premiums you have paid. Even if you only plan on going without insurance for a short time, as much we don’t want to imagine the worst, you never know when a serious accident or illness may happen.
Don’t buy from the first company that approaches you
Survey the market and consult widely. Find out about the benefits of each product comparing with those of other companies. Is the company offering the best service at the cheapest rate possible? Check out the company’s compensation history. Does it have many people complaining about a long tedious payment process? What is its financial muscle? How secure is it in itself? An insurance broker will have this info readily available. You want to get your full benefit of the fortune you are entrusting in insurance.
Don’t forfeit premium payments
If at all possible, pay the policy premium a year at a time. Many companies are now charging additional fees if you make monthly premium payments. Depending on the statutes of different insurance companies, delayed payment has its repercussions. Make a point of depositing all your premiums as stipulated—so that come need for coverage, you are in the company’s better books—in a position to be compensated.
In closing
When you follow the above tips for purchasing life insurance cover, you will quickly see that your policy will be available from a reputable company and at the lowest rate possible. You also won’t have to worry that your policy won’t pay out upon your death. One of the most satisfying feelings you can have is knowing that your family will be taken care of after you pass on.
Gerald Muriungi is an Advocate of the High Court of Kenya.
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