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Insurance Article

Are you covered by these 5 critical insurance policies?

December 03 2018

Everyone must have at lease these five insurance policies

Offering financial cushion against various uncertainties of life, insurance warrants a place in one’s portfolio. Unfortunately, insurance penetration in India is still low compared to other emerging economies of Asia. According to the Economic Survey of India 2018, insurance penetration in India stood at 3.49% in 2016-17, a marginal rise from 2.71% in 2001.

Broadly categorised into life and general insurance, there are a host of policies for you to choose from. Each insurance policy serves a specific purpose. While it’s not essential to buy all of them, it’s prudent for you to be covered by these five critical insurance plans.

  • Health Insurance
  • A health insurance plan prevents out-of-pocket expenses while dealing with a medical contingency. While you can opt for a standalone health cover, family floater plans offer coverage to all the members of your family. Generally, health insurance plans are indemnity plans that reimburse actual hospitalisation expenses.

    On the other hand, critical illness plans are fixed-benefit plans which offer a lump sum upon diagnosis of a critical ailment mentioned in the policy. These plans cover pre- and post-hospitalisation expenses. As costs of treating a critical ailment can potentially wipe out all your savings, experts recommend having a critical illness plan on top of a health insurance plan for comprehensive protection.

    While buying a health insurance policy, do check the claims settlement ratio of the insurer along with the sub-limit and co-pay clauses among others. It’s also important to find out about the waiting period and exclusions of a policy.

  • Home Insurance
  • A general insurance policy, home insurance provides coverage to one of your most precious assets – your home. You can either buy an insurance policy for the structure of the building or its belongings or both. It offers coverage to your home as well as its belongings from natural calamities and disasters such as floods, earthquakes, fire, storms, and lightning among others.

    Since it takes a lot of efforts and finances to build a home and decorate it with the items you love, a damage can not only be an emotional but also a financial setback. Having a home insurance in place ensures you have a safety net to fall back on in case of any unforeseen circumstances. While buying a home insurance policy, along with the sum insured, do check out the exclusions to prevent surprises later.

  • Motor Insurance
  • If you have a two-wheeler or four-wheeler, motor insurance is a must. You can either buy a comprehensive motor insurance policy or a third-party insurance cover. A comprehensive motor insurance policy provides 360-degree protection to you and your vehicle against the damages suffered due to an accident or theft.

    A third-party insurance cover protects you against legal liabilities arising out of accident/damage caused to a third-party from your vehicle. It’s a statutory requirement for all vehicles plying on Indian roads to have third-party insurance under the Motor Vehicles Act, 1988.

    Following a Supreme Court order and IRDAI diktat, insurers have now rolled-out three and five-year third-party liability cover for new four and two-wheelers. Opting for a long-term cover ensures your vehicle doesn’t run the risk of being uninsured.

    Whether you are opting for an insurance policy for bike or insurance policy for car, do check out the add-ons available for better protection.

  • Life Insurance
  • Life insurance is one of the most trusted financial instruments shielding you and your family in case of an eventuality. While a pure term life insurance primarily offers death benefits, endowment, money back and unit-linked insurance plans (ULIPs) have an investment component. These plans invest a certain part of the premium paid in the market to earn returns and offer maturity benefits as well.

    The cornerstone of financial planning, life insurance helps your loved ones stay financially independent and maintain the lifestyle provided in case you are no longer there. It also helps your dependents square off loans and keep essential financial goals on track.

    Just like a general insurance policy, you can buy life insurance online. Read the fine print thoroughly to make an informed choice.

  • Travel Insurance
  • Travel insurance safeguards you from financial hassles that you may encounter while travelling in the country or abroad. It protects you from losses suffered due to lost baggage, delay/cancellation of flights, medical contingency, etc.

    When you are travelling with your family or friends, make sure to avail a travel insurance policy to safeguard yourself from unforeseen circumstances that you might encounter in your journey. You can buy a travel insurance online or offline.

    Conduct extensive research before opting for a policy. Online insurance research has become easy with several aggregator websites listing offerings from different insurers.

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