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Chuks Udo Okonta
Knowing when to exit an insurance policy would save you from burning your fingers and recover some of your investments in an insurance contract.
You don’t have to wait till an insurance firm is liquidated before seeking for refund. Wise policyholders keep their eyes on their investments daily, monitoring daily happenings in insurance companies were there risks are insured or fund invested.
In life insurance contracts, policyholders are allowed to exit and make surrender value.
Surrender value is the amount the policyholder will get from the life insurance company if he/she decides to exit the policy before maturity.
A mid-term surrender would result in the policyholder getting a sum of what has been allocated towards savings and the earnings thereon.
When to exit
* Claims crises
When a company is struggling to meet its claims responsibilities, you should be ready to exit. Oftentimes, most policyholders are not aware of claims payment challenges faced by insurers due to their lack of attention on the underwriters.
As a policyholder, you should give attention to the claims settlement process of your insurers to know if they are financially capable to hold your risks or investment.
* Management issues
Insurance firms with unstable management, should be facing internal crisis, which may affect your investments. Once this is identified, it is time to exit.
* Staff complaints
The employees of a firm are the image of the organisation. Expressions by the employees should be thoroughly examined and aid your decision to remain or exit.
* Regulatory sanctions.
You should regularly examine the financial accounts of your insurer to ascertain the frequency of regulatory sanctions meted on it. Also read about the company’s rating by the regulators. Especially public quoted firms. The Stock Exchange would always published fines on infractions imposed on them.
* Unethical practices
Insurance firms perpetuating unethical vices should be avoided. Exit a policy once an unethical practice is observed to be perpetuated by an insurer.
* Inability to premium
When you are unable to continue with payment of premium, contact the company and exit the policy.
To enjoy your insurance coverage and investments, you should regularly conduct Know-Your-Insurer.
Don’t wait for the company to be insolvent before trying to exit, working on early trouble signs, would help you not to be trapped.
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