The Importance of Having Robust Insurance Coverage

While we wish for a fun-filled and smooth-sailing life with no accidents, illnesses or damages to our property, the unexpected can sometimes occur in the most unlikely of timing. These unexpected misfortunes can wreck our lives or even the lives of our family members.

While we cannot predict the future, we can still prepare for any misfortunes that might arise. One of the best way to do so is to get appropriate insurance coverage to cover you financially for any accidents or illness that fate can throw at you. You can also apply for appropriate insurance schemes for your family members.

Insurance is thus necessary as it helps to elevate your financial burden in the event an unfortunate accident were to occur. It also lifts the financial burden your family will have to bear in the absence of insurance. Insurance is thus a vital component of your financial health. The key is to select the appropriate insurance plan for your varying financial needs.

This article will touch on the key types of insurance coverage that you can seek out for your respective needs.

Life Insurance

Life insurance policies will pay out a sum of money to your beneficiaries (usually your family members) in the event of your death. This is important especially if you are a key bread-winner of your family and your family relies on your income for their daily living expenses.

Term Insurance

Term Insurance will pay out a sum of money to your beneficiaries in the event of your death, but this arrangement is enforceable for only a period (e.g. 5 years, or 10 years). Thus, term insurance is a temporary policy that can be used as supplements to your life insurance policy.

Annuities

Annuities are usually beneficial for the retired or old-aged. Annuity plans pay out a regular income (usually on a monthly basis) that the retired or old-aged can use to cover their monthly expenses. Some annuities have payouts that last until the death of the individual. A good plan to have especially if you are expected to live a longer life after retirement since the mean lifespan of individuals living in developed countries (and many developing countries) are increasing statistically every generation.

Disability Riders

Pays out a sum of money to cover your medical and hospital bills in the event of a disability (e.g. due to an accident). Disability riders are usually created as an ‘add-on’ to your life insurance policies.

Critical Illness Riders

Pays out a sum of money to cover your medical and hospital bills in the event of a critical illness. Critical illness riders are usually created as an ‘add-on’ to your life insurance policies.

Investment-Linked Plans (ILPS)

This policy is a hybrid between a life insurance plan and a mutual fund (also known as unit trust). Part of your premiums can be used to fund a life insurance plan, and part of it can be used to invest in a mutual fund of your choice. Sometimes, earnings from your mutual fund can be cashed out, or be used to purchase additional units of your life insurance policy to increase your insurance coverage.

Endowment Funds or Savings Plans

These are savings plans that usually requires you to save a sum of money every month or every year. Under this plan, your savings will benefit from interest given by the insurance company, and you will be able to cash out your savings with interests after a pre-decided duration. This is a good plan to have when you are saving for your children’s college tuition to be expensed some years from now.

Conclusion

Selecting the appropriate financial plan is essential as it provides you with coverage that are suitable to your needs and the needs of your family. It is thus vital to understand the different types of insurance products listed above before committing to an insurance plan.

About The Author

Kwan Hong delivers impactful workshops and seminars in public speaking, communication skills, career skills, leadership, personal peak performance, entrepreneurship and business development. He has synthesized knowledge from 8 Degrees and Diplomas, from over 100 certifications and from 1000 books to bring his clients the best tips, tricks and techniques for personal success.

Till date, 120,000 participants from over 100 organizations and events have benefited from his speaking engagements.

Never Compare Insurance Based On Price Alone

Insurance comparison websites simplify the insurance buying process and most people now buy insurance through these sites. Once you know the class of cover you need, you type a few details into any of these sites and instantly gain access to multiple insurance companies with the cheapest quote displayed in a few seconds.

While the process of buying insurance especially car and home insurance appear simplified, same cannot be said of the products.

The insured enters into a contract every time he/she buys an insurance policy and like any contract needs to be examined carefully to ascertain its suitability for the buyer.

The frequency of advertisement in both the print and electronic media by the owners of these sites drowns out complaints and muttering of people who may have had a claim declined because they based their insurance purchase decision on price (premium) alone.

As a way of illustrating how the use of price alone to select an appropriate insurance policy could be problematic, let us look at how the price of a burger is determined.

£0.99 could fetch you a burger at a McDonald’s restaurant but that same store will also have a burger made with a bun of similar size for £5.99. The difference in the price of the two burgers being the topping.

While the cheaper burger may only contain beef, the more expensive offering will probably have a better quality beef, possibly bacon plus lettuce, onion, Mayonnaise, mushroom and pickles.

The £0.99 burger (let’s call this the bare-bones burger) may appeal to some but may not necessarily be what others want.

The £5.99 burger (ROBUST burger) though more expensive, may just be what the other person needs to satisfy his appetite and is willing to pay the extra to meet his needs provided he is aware of the extras which add up to make this other burger expensive.

Bare-bones vs Comprehensive policies

Much like the example above, insurance policies can also be said to either bare-bones or ROBUST/comprehensive. However, it is not always easy for every insurance buyer to tell the difference between the bare-bones policy and the comprehensive, especially when presented in abridged versions with the cheapest ranked topmost.

Risks covered as standard by insurance company ‘A’ could be sold as an add-on by company ‘B’.

The premium quoted by ‘A’ may thus appear higher than that of ‘B’ because the standard policy ‘B’ is offering is a bare-bones cover. If you then opt for this policy because of the cheaper price without realizing that some of the risks you need are not included, this could lead to a dispute when a loss/claim is reported.

Possible Conflict of Interest

Some of the comparison websites are either wholly or partly owned by Insurance companies and thus a conflict of interest may arise. Results of premiums quoted could thus be skewed in favour of the parent or partner companies.

Operators of these sites may also be swayed by the offer high commission rates resulting in the sites promoting particular brands.

Some Insurers are not Included

As at a time of writing, some of the largest insurance companies in Britain notably Aviva and Direct Line are not listed on comparison websites so it is possible that improved terms could be obtained from companies not listed.

Finally, it is worthy of note that these comparison sites only serve as a go-between, linking the prospective buyer to the insurance companies. They only present premiums generated using algorithms furnished by insurers and afterward direct a buyer to the website of the insurer with the chosen quote. In the event that a dispute arises, traceable to a misunderstanding at the point of quotation, these firms are unlikely to assume responsibility.

Ikenna is a Chartered Insurance practitioner based in London with over two decades experience in Insurance operations. He has sold Insurance policies in the past, and at other times been involved in drafting / wording insurance contracts as well as helping customers through the insurance claims process.

Telematics and Big Data: Next Generation Automotive Technology

Telematics, Big Data, and Analytics are the three big important ways that are driving the auto industry forward. In this article, we will see how big data analytics, with the insights of information processing, can help transform the automotive and transportation industry globally.

The future of telematics is with big data.

Traditionally, in most automotive and transportation enterprises, specialized business processes have always been analyzed and modeled on whatever limited empirical data or contextual information was available to them. Proper data was few and far between. Or, even if the required data was available, enterprises hardly had any technological know-how with them to harness all the information necessary for their use. It was quite a difficult task to deal with such a situation where enterprises heavily relied upon conventional methods such as going through previous driving records, including taking into account people’s age and gender, locale demographics to accurately predict risk levels among its consumer base. This was something haphazard, awkward and unreliable.

Now with the advanced big data analytics, accessibility to scores of information and the science of telematics are putting the current understandings in new light, offering new conversation starters, and creating new potential outcomes that were not really possible before. “Big Data” as we know it is changing everything for the better. It is changing how the vehicles are built, how they work, how we use them and how they collaborate with everything else in this world: From vehicle-assembling to insurance underwriting, to traffic modeling to optimizing traffic routes, Big Data is changing the world of car/fleet transportation industry in a big way.

Big data analytics plays a very important role in the telematics field. The fact of the matter is that the science of telematics which involves telecommunications and vehicular technologies demonstrates how big data analytics can improve supply chain management, fleet management, increase yield and drastically reduce material costs, not to mention the quality and safety issues that never get compromised using proper big data analytics. In fact, the use of relevant data directly leads to more opportunities. It is in this context we will see how Big Data is bringing transformative elements into the various industry sectors especially in insurance, financial, automotive and transportation and other sectors and improve their business processes.

Telematics All The Way

Telematics is ushering an era of big changes. The way vehicles are insured and how they are driven or repaired are all changing for the better.

Earlier, we have seen that insurance and maintenance standards of vehicles were based on some kind of conjecture and the rough utilization of crude data that was available at hand. But with the use of telematics, a strong evidence of data is promptly accessible that can revamp entire branches of the commercial enterprises and change drivers’ driving behaviors.

Thanks to telematics, the wealth of data that can be derived from vehicles can also be made available to drivers. This is also one of the big changes that telematics promises. As far as valid data is concerned, there are simple ways people can immediately access from their connected car, and this same data can also be transmitted to the manufacturers or insurance companies for that matter. So when data is available and is accessible to users then there is going to be better understandings of their vehicles’ performance, ultimately resulting in helping drivers adopt good driving behavior. Drivers will have access to GPS-related data that will let them know their driving styles, including real-time information on fuel consumption, speed limits, hard acceleration, braking, phone distraction, etc. All this useful information can impact not only their driving performance but also can extend the longevity of their cars.

Driving Innovation and Continued Growth for Auto Insurance

To give you just one example: Consider the insurance industry. Using the great combination of telematics and big data analytics, insurance companies are able to enhance their business processes to an extent that was not possible before.

Basically, the insurance industry is based on analytics and probability. Therefore, to have a proper access to accurate and in-depth data that identifies with every customer’s lifestyle and risk always works in the best interest of the insurance industry. This is an area where telematics has been adding quite a lot of significant value propositions that matter greatly to both insurance companies and their paying clients alike.

With telematics and big data analytics, insurance companies don’t have to resort to guesswork to fix premiums for their customers. It has enabled insurers to reward policyholders, who display good driving conduct and check their vehicle health stats, with lower premiums and rebate offerings by taking the guesswork out of the equation. This is nothing but a big data approach to telematics insurance.

Telematics is a positive trendsetter and has grown exponentially in recent years. The positive impact that it has over companies and consumers alike is proving to be a win-win deal for everyone. And as far as telematics is concerned Big Data would be there too, working hand in hand. Not only consumers but automotive manufacturers and service providers as well are going to get greatly benefitted from the marriage of big data and telematics. And since the relationship is really symbiotic, big data is going to be the future of telematics. Embrace big data and telematics in a big way!

What to Know About Child Insurance?

Life insurance plans are designed to make life easy for their beneficiaries. The life insurers study the problems that a person can face and device financial solutions to ease them. One of the big problems many people struggle with is to provide a sound future to their kids. Cost of higher education is really back breaking and is one of the biggest stress causing factors among parents. To ease this problem to a good extent life insurance companies have come up with a specialized plan called child insurance.

Child insurance plans carry dual benefit for the child. First, they help generate a good corpus by investing the premiums in a fund that can either be endowment based or ULIP based. Second, they provide a life cover to the investing parent of which the child is the beneficiary. In case of the death of the policyholder, the insurance company waives off the future premiums and continues to invest in that fund on the policyholder’s behalf. Moreover, it pays a lump sum or period amount for the maintenance of the child. Thus, these plans protect the interest of the child even when you are not with him/her.

Saving money on our own can be difficult as we cannot be that much disciplined unless we enter into a plan which necessitates us to deposit a particular amount or else it would lapse. Such routine is mandatory for systematic saving and investment. The returns from other funds or investments can get spent on other things. That is why it would be better if you have a dedicated child plan in your investment portfolio of which only your child would be the beneficiary.

As per financial experts, investing in such a plan should be started as early as possible to have more time for your money to grow. Ideally you should start comparing child insurance plans of various companies as soon as you know about the pregnancy. There are over a score of companies selling such plans and offer differentiated plans to stay competitive. Effective plan comparison and market research shall ascend you towards the most suitable plan from a reputed company.

For effective comparison you may try services of an insurance web aggregator. On a web aggregator website you can compare plans of scores of companies at a single web location and that too free of cost. Such effective comparison brings more confidence in your purchase and helps you take educated steps in selecting your plan type. Based on such comparison and analysis you can decide whether to go for an Endowment based child plan or a ULIP based child plan. Comparing premiums with your budget you can decide how much cover to go for.

If you are a parent then initiate the process now without wasting further time. Your smart actions now would earn you enormous gratitude from your kid in the future. Don’t miss the opportunity to have that puffed up chest when your kid makes a lucrative career for himself. His hard work won’t do that alone. He needs your financial support to climb that ladder.