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Five Insurances Every One Must Have.

1) Personal Accident Cover

Personal accident cover basically covers the risk of accidental death and permanent total disablement, and is a good choice to supplement a life insurance policy.

The best part of it is that it is the cheapest cover for self protection and can be taken even by those whose income is low or cannot qualify for life insurance due to medical issues.

Personal accident cover is also recommended in the early stages of life when one has just started his/her career.

“Persons below the age of 40 have a bigger risk from death and disability due to an accident compared to any other risk. Disability for a young person can be a bigger tragedy than death. Personal accident insurance provides an extremely low cost option of covering this risk,” says Rahul Aggarwal, CEO, Optima Insurance Brokers.

2. Health Insurance

With healthcare becoming increasingly expensive the world over, health insurance has become a must today. If you are covered under health insurance provided by your employer, there is nothing like that as that usually comes free.

If not, you should try to get a health cover for yourself as well as for the members of your family. If you can’t afford specialized health insurance, at least try to take a basic hospitalisation cover which will function as the security blanket for your family against treatment of any sudden illness or injury. Since basic covers cost less, you can save some money on their premiums.

“The coverage, however, should take into consideration the health care costs in your city/town. Normally, a sum insured of Rs 2 or 3 lakh would be required. If the customer chooses to, he/she can take a higher cover also, depending on his/her needs,” says Balaji Cuddapah, vice president, property & engineering, Bharti AXA General Insurance.

3) Critical Illness Cover

By opting for this cover, you can insure yourself against the risk of serious illness in much the same way as you insure your car and your house.

Under this cover, a guaranteed cash sum is paid if the unexpected happens and someone is diagnosed with a critical illness such as cancer, stroke and kidney failure.

The benefit amount is payable once the disease is diagnosed meeting specific criteria and the insured survives 30 days after the diagnosis. This is, in fact, a very important cover for persons who have crossed 45 years of age.

“Although a health insurance policy covers hospitalization expenses, critical illness involves a lot of expenditure even when the person is not hospitalized. Expensive medicines and diagnostic tests, regular doctor visits, special diets etc. add up to a lot of money. A critical illness policy provides financial stability by providing upfront money to the insured for all the treatment,” says Aggarwal.

4) Term Insurance

Once a person crosses 35 years of age, the risk of diseases and ailments starts increasing. The person also becomes more prone to lifestyle diseases.

Now it is not uncommon to hear of persons who have died of a heart attack at the age of 30 or 35. Hence it becomes important to cover the risk of death due to reasons other than accident.

Term insurance is a no-frills, low-cost option to secure financial security for the family, and therefore should preferably be there in everyone’s insurance portfolio.

“Every human being has a quantifiable economic value for his dependents. Any amount of loan that a person has taken gets added to this value. Protection of this economic value is very important, especially in India which does not have a strong social security net. A term insurance is the cheapest way to cover oneself for one’s Human Life Value (HLV),” says Rajesh Relan, managing director, MetLife India Insurance.

5. Home Insurance

Your home is not just your most valuable asset, it’s your safe haven from the world outside. However, while your home cocoons you and your family, it’s your responsibility to see that nothing untoward happens to the building and its contents. Therefore, insuring your home is as essential as ensuring that it has strong foundations.

A home insurance policy, also known as householders’ insurance, is the best bet to safeguard your house because “it not only covers the structure of your home but also all its valuable contents from different kinds of perils such as earthquake, fire, terrorism, flood, burglary and house-breaking,” says Ajay Bimbhet, MD, Royal Sundaram Alliance Insurance Company Ltd.

Also, weather has become very unpredictable and vicious in the last one decade. The unpredictability of weather, its extremes and increasing crimes in urban areas are reason enough to take this policy.

//Source: Economic Times

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