INTERVIEW QUESTIONS INSURANCE DETAILS

Question: Is it advisable to cancel my existing policy and replace it with another?

Answer: Ideally, you should not replace any existing policy with a new one as many benefits are provided only after few years of taking the policy.

Still, you may replace the existing insurance policy under following situations:-
1. If the existing insurance cost is higher than the similar product of same company or the other company in market.

2. If the replacement cost of policy is lower than the benefits earned after shifting to other arrangement then you can look forward for the alternate.

3. If the terms and condition of the existing policy doesn’t suit to your goal due to changed circumstances in the future then prefer a replacement with more suitable policy.

4. You would not be entitled to any return if the policy is discontinued before 3 years of policy term. So, either cancel it in the first year to minimize the loss or complete the 3 years at least.

5. If it’s an endowment policy then bifurcate the insurance cost and saving element from the premium, thereafter compare the return on investment with other products available in the market. Opt for the change if return part is not attractive.

6. It’s better to replace an endowment policy when you are falling short of total insurance requirement i.e. you are under-insured and take a term plan for getting fully insured as per requirements. You can put the differential premium in better saving instruments with higher return.

Ideally, you should not replace any existing policy with a new one as many benefits are provided only after few years of taking the policy.

Still, you may replace the existing insurance policy under following situations:-
1. If the existing insurance cost is higher than the similar product of same company or the other company in market.

2. If the replacement cost of policy is lower than the benefits earned after shifting to other arrangement then you can look forward for the alternate.

3. If the terms and condition of the existing policy doesn’t suit to your goal due to changed circumstances in the future then prefer a replacement with more suitable policy.

4. You would not be entitled to any return if the policy is discontinued before 3 years of policy term. So, either cancel it in the first year to minimize the loss or complete the 3 years at least.

5. If it’s an endowment policy then bifurcate the insurance cost and saving element from the premium, thereafter compare the return on investment with other products available in the market. Opt for the change if return part is not attractive.

6. It’s better to replace an endowment policy when you are falling short of total insurance requirement i.e. you are under-insured and take a term plan for getting fully insured as per requirements. You can put the differential premium in better saving instruments with higher return.
Source: CoolInterview.com

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