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5 Crucial Factors to Keep in Mind Before Buying an Insurance Plan


At times, people come across a situation where they think that the decision taken was right. Some decisions might concern financial life. Investing a significant portion of the wealth into a company, financial product or in a bank, without having a proper understanding of how does it work is a very common issue.
Not to mention, in such cases, the mind is always in a dilemma or uncertainty, and it questions whether the decision was right or not. The level of confusion rises even more in case the investment is based on the long-term insurance product.
This post talks about the factors that you should consider before choosing a particular insurance plan.



1.      Investment Based on Needs
The standard thumb rule is that the life cover South Africa or taken from any other place should always be ten times the annual income of the person so that the family is secured financially in case of any crisis.
It is also crucial to keep it in mind that insurance is a protection cum long-term investment as well as a savings tool. And thus, you need to define the needs such as education of your child or retirement plans and then should buy a policy that would help to serve the requirement. 


2.      Performance of the Fund
Before buying an insurance plan, have a look at the past performance of the company. Most of the service providers offer details related to the performance of their funds online. Another useful thing to consider in this context is the stability aspect. A company with good fund performance will always have a consistent track record without being inconsistent or extremely risky.


3.      Background Check and Due Diligence
Before moving with the final decision, make sure to conduct the background check of the company. All the companies in the industry have inclusive disclosures on the site that comes with valid information. Make sure to look after the factors like structure of the policy, the scope of the network, customer service capabilities, etc.


4.      Claim Settlement Ratio
Most of the financial advisors suggest that the claim settlement ratio of any given financial company should be checked or discussed before taking the final call. Although, it should not be of any concern as long as the information offered in the form are correct. The overall sector of the insurance is regulated, and the possibilities of a rightful claim for not being settled are quite rare. 


5.      Knowledge of the Policy
Once the need for insurance is obvious with a detailed track record of the company, it is important to understand the features of the policy. It gets even more important for the ones that are related to the premium-paying term, policy term, maturity date as well as charges. 
Whether you are getting life cover or best funeral cover in Sa or from any other location, without knowing the policy in details as well as is silent features, it is suggested not to move ahead.

All these factors will help to resolve some related concerns about whether to buy the policy or not. Having enough familiarity with all these factors would also bring a source of relief as well as assurance in life.
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Location: Cape Town, 7750, South Africa

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