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Making the right insurance choice

Pieter Du Toit, insurance expert at First National Bank provides some guidance to ease the process of choosing an insurer.

1 September 2010 · Staff Writer

Insurance is one of those things that people do not want to think about. No one likes the idea of loss or death and the potential problems associated with them. Pieter Du Toit, insurance expert at First National Bank provides some guidance to ease the process of choosing an insurer.

As daunting as the prospect might seem, there are many reasons to get covered. Having the right type of cover with a reputable, established institution can give you peace of mind.

Firstly, you need to understand your needs. Use what those you leave behind will need once you are gone to be your guide. The most immediate is undoubtedly Funeral Insurance - FNB offers a Funeral Plan that caters for every need and budget. What financial obligations will your dependants have afterwards? Various types of life insurance will ensure that those obligations are met.

Secondly, you need to know what you can afford. Finding the "perfect cover" and not being able to afford it is like owning a sports car and not having petrol. Defaulting on payments could result in you losing the benefits of the policy.

Compare quotes from different service provider's offerings and decide what will best suit your needs and pocket.

This might seem obvious, but living a healthy lifestyle is important. Many insurance companies either require that you undergo a medical examination or that you truthfully answer questions regarding your health. Steps like quitting smoking; reducing your cholesterol and a more active lifestyle cannot only help you get a cheaper premium but will also mean a better life for you and those close to you.

Look at your purchasing options. You can go direct, use a financial planner or buy through an insurance agent. Ask about other fees which could affect your premium.

Find a reliable, established institution to insure with. With the stories we regularly hear about people losing money in pyramid schemes and to fly-by night operators, insure with a company you know will still be around in the years to come.

Change your insurance as your lifestyle changes. As you grow older, your needs and the needs of your dependants will change. Do not leave your insurance in the past, let it evolve and develop with you. In order to do this, you need to understand what insurance you currently own. You need to always study the terms and conditions of the policy you own to best make use of it. Through all this, ensure that all the details you provide your insurer are correct, incorrect information might lead to the termination of a contract or the loss of benefits.

Be careful you are not over-insured. Over-insurance refers to owning an excess amount of insurance with the same insurer. If you have more than one of the same type of policy with an insurer, you could be over-insured and your second claim might be rejected. To avoid such situations, study the terms and conditions of your policy to gain an understanding of what your insurer regards as "over-insurance".

With just a little effort, you can find the right insurance and make it work for you. And knowing you and those you love are covered will bring you one step closer to sleeping better at night.

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