Whether you are taking life insurance as a requirement for your homeloan or you are simply exercising responsible financial behaviour to safeguard against financial losses, it’s very important to understand your policy inside out, says FNB Life CEO, Lee Bromfield.
He adds that currently most consumers that take up life insurance often do not understand everything about their policy.
“There are a number of reasons for this, including the complexity of policy documents and individuals simply feeling discouraged to go through the reams of documents they get from their insurer. However, consumers need to take proactive steps to ensure that they know exactly what their policy entails.”
Raise all the important questions when sourcing quotes
Do your homework before getting quotes so that you are clear about the type of policy you want. Prepare important questions ahead of time to get clarity on each of those.
“Be prepared, as much as possible, because life insurance is a major undertaking and an essential component of your financial wellbeing,” says Bromfield.
Read your policy document
It’s common knowledge that most insurance policyholders hardly ever go through their insurance policy documents, but Bromfield says this is a big mistake.
“Your policy document must reflect what you agreed to – It’s important to take the necessary time to verify that everything in the documents is exactly what you asked for.”
Do not overlook discrepancies, big or small
Sometimes policyholders overlook ‘small’ discrepancies in their documents, risking the validity of their policy or claim.
“A presumably small error on your life policy, such as the incorrect capturing of your ID number, could lead to bigger problems when you need to claim. It is important to ensure that every single detail is captured correctly, and where there are errors, those need to be corrected immediately.”
Bromfield adds that consumers also need to look out for any additions they did not ask for, because unscrupulous providers often include certain aspects simply to increase the cost. “Every cent counts, so it’s important to pay attention to all the details of your life insurance policy and where you are not clear, do not hesitate to ask questions.”