Insurance checklist for year end

A healthy, up-to-date and apt insurance cover is important for individuals’ financial health. A periodic maintenance check across life, health and general insurance products can be a useful way to review the portfolio, cull the excess or plug any unhedged risks. This exercise can map any incremental changes in risk metrics over the year to changes in product covering the same as well.

General checks

Insurance as a marketplace is evolving, with new features being introduced every year. Zero-cost insurance in term, wellness as a segment in health insurance, and switch-on/off in car insurance are some of the developments in the year. Policyholders can talk to the providers and check if such upgrades are accessible in the existing policies.

One definite improvement that has happened is digital reach of providers through WhatsApp business accounts or apps, a rare positive outcome post-Covid. Policyholders can check if they are in the loop. Personal details including nominee (where applicable) and contact details are crucial details that can be checked/updated through such new methods. Another basic exercise worth undertaking is to check the premium payment status and to automate the same if an option. Claim processing, when required, should not be hindered by such trivial oversights.

Product specific checks

In term insurance, the primary check revolves around human life value (present value of future income over liabilities). Trading down on term cover is not intended, but a significant uptick in income status or addition of significant liability like home loan or a business loan should be reflected in term insurance covers. A term cover for non-working spouse can now be initiated, which comes at a reasonable discount. A significant change in policyholders health status must be informed to term insurance provider as well as health insurance providers.

In health insurance, cover enhancement through No claim bonus (if applicable) is automatic and must be checked. Also PED counter — counting down four or two years since policy purchase to cover pre-existing diseases — can be checked. In family floaters, only cover enhancements are possible as new additions to family (spouse or child) will have to done promptly within 60-day periods. In health insurance, add-ons and supplements have a life of their own and a separate audit can be beneficial.

As mentioned, new features covering critical illness, PED buybacks, higher sub-limits, especially room rent (new policies are starting from single AC room), can be browsed and added to existing policies. It may be prudent to inform the existing insurer of any top-up or super-top added in the year that is different from the existing insurer. Wellness points accumulated through the year and expiry of the same for renewal discount can also be checked.

For car or home insurance, upgrading from nominal to functional can be considered. Depending on threat perception from floods, theft, and accidents, insurance can move from third party to comprehensive in car insurance or building only to building and content insurance for home. NCB similar to health insurance and IDV (insurance declared value) similar to HLV in term insurance can be checked for car insurance. Further savings can be unlocked by moving to switch on or off feature in car insurance.

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