Insurance

 If you have these five essential covers, you need not worry; but if you don’t, use the festivals as an opportunity to set things right.

Life insurance

This cover is especially important for the primary earner of the household to ensure that death does not affect at least the lifestyle of the dependants. If you do not have a life cover yet, opt for a term cover. If you die during the term, your nominees get the sum assured.
And if you survive the term, you get nothing back. But this is better than the normal Traditional plan offered by the Life Insurance companies. Please separate insurance and investment plan. Because Traditional plan generally returns 5% to 6% that is also not guaranteed. The ideal sum assured is 150 times of the Monthly Expenses; if there is a home loan or any other type of loan, get a cover for that amount as well.

Health insurance

Healthcare costs are astronomical and emergencies can crop up any time. Therefore, health cover for the whole family is a must. Even if your employer offers group medical cover, it’s better to get your own as portability from a group cover to individual cover is not smooth. Start with an indemnity policy; it pays for hospital bills and also reimburses expenses incurred before and after hospitalization. You could either buy it for each family member or a floater policy. A floater policy considers the entire family as a single unit. Going by the average cost of major surgeries, a sum insured of at least Rs.4-5 lakh for an individual is important. You can supplement the health insurance needs with Top up/Super Top up plan.

Mind it for insurance 2 things are necessary, one is Money, regarding which you may not have worry in future and other is Health. If future there will be no guarantee that you will enjoy a good health as young age. And no insurance co will not provide you the insurance coverage or may charge very high premium with loading and different terms and conditions.

Personal accident Cover

This cover offers financial compensation if you meet with an accident. This policy comes with four covers: death, permanent disability, permanent partial disability and temporary total disability. Opt for a comprehensive plan that covers all four. Typically, the maximum cover you can get is 10 times your annual income.

Householder’s insurance

It not only insures your home, even if rented, against unpredictable events, such as an earthquake or a fire, but also your valuables such as consumer durables and jewellery. It also insures against burglary, theft and so on. You can opt for a reinstatement cover that will cover the cost of reinstating the damaged portion of the house and the contents. Make sure you adequately insure the house. Say, the cost of construction of your house is Rs.1 crore and you take a cover of Rs.50 lakh. If you make a claim of Rs.10 lakh, the insurer will only pay Rs.5 lakh.

Motor insurance

In addition to taking the mandatory third-party cover, you need to cover your car against any damage. A comprehensive car insurance policy covers not only your liability towards a third party but also pays for damages to your car and to the passengers in case of death. Though there are many riders to choose from, the three important ones are: depreciation cover, return to invoice and insurance for the car engine. High-end car owners should opt for more riders. You should transfer the no-claim bonus (available under comprehensive covers) when buying a new car. This way, you would be able to save 20-50% on the first premium.