So you spent days, even months researching insurance and how you can benefit from it. You’ve talked with a couple of insurance brokers and discussed a couple of plans that might work for you. And finally, here you are, officially decided to apply for insurance plan that seems to suit your future goals.
You might expect that there’s nothing to worry about now since all you have to do is submit the needed documents, and that’s it. Well, we all hope and wish for a seamless and fast application. But the reality is, there’s more that we have to understand and process about any type of policy, including business insurance.
To give you a brief head start on what the process will be as you apply for and get your long-awaited insurance, here are 5 things that you can expect along the way.
1. Questions, questions, questions. And more questions
It’s a given that you’ll be asked several questions as to why you’re applying for a certain insurance plan. But, one thing to know is that there will be a lot of questions that you will be asked. Not only verbally, but written as well.
As you talk with an insurance broker, a lot of instances and information will be asked to determine if the plan that you’re applying for suits your needs and financial standing. If you’re applying for business insurance, expect the same, or even more. Businesses are more complex and require legal support as proof that your business is eligible for a certain plan.
As you undergo this process, you might find yourself sulking and sighing with questions that seem to be repetitive and unending. It’s okay. Remember, these questions will help not only the insurance broker, but yourself to understand if you’re applying for the right insurance plan.
Let them ask away all the necessary questions. Take your time to answer them honestly and don’t be afraid to share your thoughts. Also, take this opportunity to clarify and ask your queries too. It will surely help you see your insurance plan in a better light.
2. Expect a risk underwriting assessment
The question and answer part is just the beginning. But, your answers to the said questions give your insurance broker and company a hint of your underwriting stand. Underwriting in insurance is the term used to describe the process of assessing an insurer’s risk.
Every question that you’ve been asked is used to determine how many risks that you or your business might have in the future. If you’re applying for health or life insurance, expect that you’ll go through a couple of medical assessments.
For business insurance, expect the same. You’ll probably need to provide your insurance broker or company with your yearly revenue. This will help them draw a graph of the possible risks that your company might have in the future. Also, with this, they can better assess and recommend if your business underwriting is more suitable for a plan with bigger coverage or vice versa.
The underwriting process can sometimes be the end game for some insurance applicants. Most especially for those whose risks are too significant for the insurance company. One thing to know is that insurance brokers and companies weigh an insurer’s risks and assess how much those can affect the company in the long run. This helps them assess if an applicant should be granted a plan or not.
3. You might have to process some legal documents to support that you are eligible for a certain plan
Part of the underwriting process is submitting legal documents. If you’re applying for business insurance, expect to submit the following documents:
- Professional certificates
- Record of business assets and liabilities
- Employee information
- Business registration and incorporation documents
- Existing insurance policies (if you have any)
- Business location and bank information
These are some of the most common documents that companies ask for business insurance applicants. If you plan to get and apply for a plan that has bigger coverage and great benefits, except that they’ll require you to provide more supporting documents aside from those listed above.
For life and health insurance applicants, you’ll usually be required to submit your medical examination results, proof of income, and other documents that the company requires. Depending on the plan, some companies only require two to three legal documents for submission. If you’re applying for a plan that has great coverage, expect to be assessed thoroughly during your underwriting.
4. Some plans will take effect after a certain period
If you’ve been approved and granted the plan that you applied for, congrats! One thing to know is that some plans take effect once you’ve been granted. For example, HMOs and basic health insurances are effective once the insurer has been approved.
But, for plans that are bigger and more complex, there are instances when you’ll have to wait a certain period before the insurance becomes effective. Of course, this will depend on the type of plan and the values and indications of your insurance contract.
Make sure to review and understand all of the policies that are stated in your contract. If you don’t understand something, don’t hesitate to consult an insurance broker. It’s best to have a professional who’ll help you understand the terms of your policy as well as when and how you’ll be able to benefit from your plan.
5. Know your deductibles and expect to pay them before you can claim your insurance payment
If, for example, the time comes that you need to use your plan, review with your insurance broker about the cost of your deductibles. A deductible is a term used in insurance that refers to the amount that you are responsible to pay towards an insured loss. In other words, the deductible is the amount subtracted from your insurance claim payment when a misfortune happens.
For example, the claim payment for your small business insurance is $10,000. But, your insurance policy states that in case you need to claim your payment, there’s a deductible of 5% before you claim the $10,000. In this case, you’ll have to settle $500 to your insurance company before they’ll pay you $10,000 to cover your business loss.
Some insurance companies offer a lower premium for insurance policies that have a high deductible rate. Depending on the type of plan that you wish to apply for, consider the deductibles and premiums of the policy. If you think that a plan with a high premium but a low deductible works better for you or vice versa, then go for it. More importantly, prioritize how much coverage you get to benefit from with the deductibles and premiums in mind.
Good luck with your insurance plan application!
If you’ve finally decided on getting one, congratulations! You’re one step closer to a more secure future. If ever you’ve been rejected from a plan that you applied for, that’s okay. You can still apply and reconsider other plans that might better work and suit your needs.
There are a lot of insurance companies that offer plans and packages that are designed to cater to specific needs. You have a lot of options to choose from, and you might just find yourself with a plan that perfectly aligns with your financial goals.
Expect that the application process can be tedious, but it will all lead to a future of security. This application will surely bring you a great deal of support when the time comes that you need it the most.