Only a consultant can give a holistic view of the policies and help you choose the right one
Only a consultant can give a holistic view of the policies and help you choose the right one
Insurance customers today have a plethora of options; All they have to do is pick and choose the insurance product that they feel is suitable for them.
The question is, as a buyer, are you confident enough to buy what you want and after knowing the product thoroughly? Or is an advisor a good sounding board?
Many of us have a family doctor who is fully aware of the health and needs of our family. It is easy to diagnose and prescribe because the fact-finding required for a good diagnosis has already been done on the basis of what we know well. Wouldn’t you rather spend time checking references before visiting a new doctor nearby or using apps that promise solutions?
The reason you do this is because you crave comfort, guidance, and personal touch.
Why is it different when it comes to insurance advice? It should ideally come from someone who knows your insurance health, wants facts objectively, requires thorough analysis and is someone you trust! As consumers of insurance products, we face two major challenges, timing and the knowledge to implement it. When these challenges are addressed by a trusted relationship with your insurance advisor, you get that all-important, anytime access with a personal touch.
It could be an insurance broking company that is in regular touch with you and gives advice to you or to an individual. In today’s context, the customer gets attractive options on insurance products with a focus on value. Price can be an important factor, but it isn’t everything.
Only after buying a policy for the wrong reasons, or with a variant you didn’t bargain for, can anyone figure out what errors of understanding were committed. It only bubbles up at the time of claiming. When insurance is sold on the basis of price, it becomes a commodity. Unfortunately for many first-time buyers, insurance comes across as a commodity. Insurance should be all about terms and conditions. For a given set of covers or conditions, you pay a certain price.
motor policies
In motor policies, the person, in the excitement of removing the new, wheeled wonder, does not see that his policy covers the correct IDV (insured declared value), add-on, zero depreciation cover, return on invoice, engine or No. Protector or anonymous traveler cover to name a few important covers.
He may have realized the confusion over the IDV of his vehicle only at the time of total loss. By changing the IDV, popular sites can offer a lower price with a lower IDV, but during claims, one may realize the drawbacks of the policy, which may cost him more money. In fact, one cannot be sure whether the model, sub-model or variant is correctly captured in the policy. A consultant can help here.
Health insurance is no different. Top-up, super top-up, home insurance and overseas mediclaim offer rich but confusing options to the retail consumer. Only an insurance professional can address each of these, which is specific to the needs of the individual in question. A web site or a mechanized caller are poor choices.
The technology is very encouraging today but should be available for transaction fulfillment. You can compare with the help of technology, but only your own insurance advisor can clarify and advise, for example, proportionate medical cost in health policy, pre-existing condition clause, room rent restriction clause, which Insurance cover suits you and your family, difference between top-up cover and super top-up, which nutritious product is available at what cost and so on.
For home insurance, there are good questions to ask about products that cover machinery break down (MBD), as electrical breakdown is not covered under MBD by some firms.
In life insurance, the maximum level of Sum Assured, its extension with add-on covers, whether linked to investments, whether they are marked as ‘participating’ or ‘non-participating’ What is guaranteed and at what rate should the internal rate of return be when the insured mixes his life insurance with the investment, are all questions with which an advisor can help. Relationship-based insurance can help not only the retail customer, but also enterprises facing more complex risks.
A dependable, relationship-based advice is from a person who isn’t ready to make a quick buck. If the product allows him a respectable fee, he will take it; If not, a good insurance broker will cover that too. At a critical moment, a consumer is better off calling their trusted broker than an unknown voice on the other end of the 1-800 number. Insurance is based on trust and should not be sold as a product.
(The writer is Director & CEO, TVS Insurance Broking Ltd.)