Let’s face it. You will have to buy insurance at some points in your life whether you like it or not. Since it’s inevitable, you might as well pick the right time to buy it to get the most out of your policies.
However, when exactly is the right time? Here are 7 of the best timings to buy your insurance policies to maximize their benefits.
1) During Their Promotional Periods
Having worked at an insurance company previously, I have got their promotional schedule all figured out. They have a tendency to give perks like shopping vouchers, cash rebates and even plane tickets during Christmas & Chinese New Year periods!
If you’re intending to buy a policy, this would be a great time to do so. Since you know that you have to buy it eventually, you might as well buy it during this period and get the $100 worth of vouchers or rebates for you to do your Christmas shopping!
2) Before Major Life Events
If you know you’re going to get married, have a child or make a big purchase (e.g. get a house), it would be worth your time to sit down with your agent to plan for it.
Buying your policies in advance would not only help you enjoy lower rates since you bought it earlier, it also helps to space out your cash flow when the big event eventually takes place (e.g. wedding expense, arrival of baby)
3) Before Major Policy Changes
Did you know that in July 2013, all insurance policies had their projected annual investment returns figure reduced from 5.25% to 4.75%? On top of that, insurance companies also took the opportunity to increase their policy premiums.
That means that if you had bought any insurance policy after July 2013, you would have enjoyed lower amounts of bonus return as compared to the policies sold before that date. Not only that, you probably had to pay a higher amount for the exact same policy as well!
Even though buying a policy with a 5.25% projected investment returns may be too late for those who are reading this right now, there is another major policy change happening this upcoming year.
As of 1 February 2015, LIA Singapore is going to revise the definitions of Critical Illness. Some people have commented that the change might result in stricter claim requirements. So if you’re intending to buy a critical illness policy, this might be a good time to look into it.
4) Before Your Birthday
As insurance companies calculate your age based on your exact date of birth, buying insurance before your birthday allows you enjoy lower premium rate. For people like me who have birthdays in December, we get to enjoy cheaper premiums and receive vouchers (#1) when we buy during this month!
5) While You’re Still Young
One of two the most common regrets I’ve heard from people is that they did not buy insurance when they were younger. (Read below for the second most common regret.)
When they had finally realized the importance of insurance, they end up purchasing the exact same policy recommended to them a few years ago, but at a much higher price.
There are two things are guaranteed to increase: your salary and your policy premiums.
If you buy your insurance and lock in the rates, you will get to enjoy your salary increase later. However, if you wait for your salary to increase before you buy your insurance, you will get to enjoy neither.
In this instance, the order of things makes a BIG difference.
6) While It’s Still Cheap
Once in a while, insurance companies might decide to readjust their premium prices… upwards. While some may happen because of government policies (e.g. change in Medishield premiums), some may happen because of company policies.
With regards to insurance matters, it always pays to buy early.
7) While You’re Still Insurable
Last but not the least, the biggest and the most common regret experienced by my clients while I was working as a financial planner was that they did not buy their insurance before they fell sick.
While it is impossible for anyone to play god and predict when they will fall sick, I believe this mistake is often committed because people typically fail to see insurability as a priceless asset.
Just like time, insurability is a priceless asset that cannot be bought back at any cost once it is lost.
If you understand the importance of insurance only after you fall sick, chances are that you would be dealt with exclusions or possibly even declined by insurance companies the next time you attempt to purchase coverage.
That would mean that you are actually paying the full price for a partial coverage!
They say a wise man learn from his mistakes, a wiser man learn from the mistake of others. I have learned much from my clients’ mistakes.
Please, don’t let that happen to you!
Image Credits: twitrcovers.com