Choosing an insurance plan that is right for you
Its that time of year for renewals, or you are just starting with insurance for your company or employees, and ohh my god, this is one daunting task ! with 35 insurance companies and over 50 Health Management Organizations (HMOs) ! Here are some things you need to know before comparing and choosing between insurance companies.
1) Insurance policy and Covers (product)
An insurance company is in its simplest forms a contract, between your company and the insurance company. In the policy there are 3 main sections you need to carefully examine – covers, general conditions, and exclusions. Covers also referred to as benefits, are simply the insurance product features. General conditions– are the general conditions of the contract. Exclusions – are what the policy will NOT cover. This combination will very based on the type of insurance plan your are considering, for example is it an employee benefit – such as medical insurance, or insurance for your company and assets such as motor or property. Here are a few examples:
Example 1: Car Insurance
Cover 1: Repair in authorized dealer (Tawkeel) / or only repair non-authorized service centers which are considerably cheaper for the insurance company
Cover 2: 100% covered in case of accident / or 80% covered in case of accident
Example 2: Medical Insurance
Cover 1: Annual ceiling 250,000 EGP / Annual ceiling 25,000
Cover 2: Dental covered/ Dental not covered
The covers you choose will have a direct impact on your product price. So before you request quotations make sure that you standardize the covers. If you send completely different covers to different insurance companies you will not be able to compare.
2) Service levels
Although all insurance companies will pay at the end according to the covers you have purchased, service levels are also an important factor. By services levels we are referring to standards such as;
- Time insurance company takes to pay out claims
- How long it takes to send an inspector
- Quality of the insurance
- companies network
- Customer services center responsiveness
- Turn around times, and so on
3) Price
Price is the amount your company will pay for the policy, covers, and service levels. Beware, the lowest price can sometimes be a trap that the novice often fall into!
- High service levels & high covers = Higher price
- Low service levels & covers = Lower costs
This does not mean you have to pay the highest price, it just means you need to strike the right balance based on your organization’s needs, and if you are buying the policy as an employee benefit or to protect your company and assets. When selecting an employee benefit always put higher weight on service levels and covers, when selecting a policy to protect your company and assets you can give a lower weight (but not compromise) on high service levels such as turn around times. You can go to this article to see why- “A benefit or a file to close?”.
