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Life insurance is no longer a luxury but a necessity. Everyone knows life is unpredictable and filled with endless highs and lows. A life insurance policy ensures that we are well equipped to handle unforeseen circumstances, so it is important to have sufficient information before subscribing.
Take Mr. Joshua, for example. He is a software developer whose dream is for his children to get the best education possible, even in his absence. For him, education is the greatest legacy he could ever leave them. He contacted Judith, a seasoned financial advisor, to inquire about a long-term Flexible Investment Education and to seek her counsel on the best insurance policy to get.
Like Mr. Joshua, many individuals are curious about life insurance but don’t have enough information to support their policy choice. Here are ten essential questions to ask before getting a life insurance policy:
- What is the Policy Duration?
Every life insurance policy has a defined term. As a policyholder, you must understand how long the policy will last and how it aligns with your long-term financial goals. For instance, if you have young children, a long-term Flexible Investment Education Plan might be ideal, because the policy will remain active until your children are financially independent.
Likewise, if you are ageing and diagnosed with a critical illness, a Critical Illness Plan could provide financial support for costly treatment plans. Your policy should reflect your current obligations and anticipated future needs.
- What is the Claim Process Like?
One of the most important things to clarify before buying a life insurance policy is the claims process. Ask how long it takes to process a claim. Find out if the insurer responds quickly to claims, and if the process is a seamless one or not. At Coronation Life Assurance Ltd, we process claims with the comfort of our customers in consideration, ensuring the process is stress-free.
- What is the Premium and Payment Frequency?
Premiums are the periodic payments policyholders make to keep their policy active, and they can be made monthly, quarterly, or annually. When comparing policies, always consider whether the premium remains the same or will increase over time.
For instance, a Term Protection Plan may offer a stable annual premium, whereas the premium of some insurance products may be adjusted based on age or health status as time goes on. Always choose a policy with a payment structure that fits comfortably within your budget and adapts to your financial needs.
- What circumstances warrant non-payment of benefits?
Some policies have benefit exemption phases or conditions during which the policy’s benefits do not accrue to the insured.
For example, some policies require a policyholder to pay their premium for ten consecutive months to access certain benefits within their policy.
It is important to confirm and understand the benefit exemption conditions and phases that apply to the policy you want to get. This will help you determine whether it is convenient for you, and if other arrangements can be made in advance.
- What happens if I can no longer afford the premium?
Ask your insurer about your options if you can’t pay your premium due to difficult and unexpected financial situations. Some policies have a grace period that allows policyholders to catch up on missed payments, while others may allow you to convert to a similar policy with lower premiums.
- What is the financial stability of the insurance company?
Before you buy a life insurance policy, verify that the insurer is financially stable and has a strong track record of paying claims to avoid hiccups in the future.
For example, Mr. Chika bought mortgage protection insurance with a third-generation life insurance company. He purchased a property, confident that the policy would be his safety net. As the ten-year policy neared its end, Mr. Chika looked forward to receiving his payout. Unfortunately, claiming his benefits became a struggle, and shortly after, he discovered that the company had folded up.
According to the National Insurance Commission (NAICOM), insurance companies in Nigeria must meet specific minimum capital requirements based on the type of insurance business they operate. The National Assembly’s bill also states that the capital requirement for life insurance companies is N10 billion, and N35 billion for reinsurance companies.
These requirements ensure the financial stability of the insurance industry and protect policyholders from being affected by an insurer that is unable to meet its claims obligations.
- What are the exclusions or limitations in the policy?
Life insurance policies may have exclusions or limitations that could affect a policyholder’s coverage. Some policies may exclude coverage for deaths resulting from high-risk activities or critical illness. The beneficiary of policyholders who pass away under such circumstances won’t receive might not receive a payout. Find out which ones are applicable to the policy you want to get.
- What additional riders or benefits are available?
Life insurance riders are optional add-ons that provide additional coverage or benefits to your base policy. Common examples include accidental death benefits and premium waiver riders. Before getting a life insurance policy, please consider whether adding a rider could enhance your overall coverage.
- Is the Insurer Customer-Centric?
Buying a life insurance policy is one thing; being valued by your insurer is another.
When choosing an insurance provider, prioritize a customer-centric company that strives to give its policyholders a delightful customer experience.
Accessibility, empathy, and consistent support are just as essential as policy benefits, so ensure your insurer has these qualities.
- Is the Policy Digitally Accessible?
In today’s tech-driven world, your life insurance experience should also be digital. Inquire about howdigitally accessible the policy is and keep an eye out for features such as online onboarding, mobile premium payments, claims via apps, and 24/7 customer portals. These conveniences make managing your policy easier and more efficient.
Conclusion
A life insurance policy could be a safety net in uncertain times and a pathway to the aspirations of your loved ones; therefore, it must not be taken lightly as the decisions you make today can shape your family’s future sooner than you think.
When you ask the right questions, you don’t just buy the right policy, you also secure peace of mind and financial stability for yourself and your loved ones.
At Coronation Life Assurance, we understand this and that is why we have an array of life insurance products that cater to diverse needs. Our dedicated team of professionals are always happy to answer your questions, give you clarity, and help you choose wisely.
For more information on life insurance, connect with us at contactcentre@coronationinsurance.com.ng or call 020-1-2774500, 020-1-2774566, 020-1-2774577
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