Top 5 must have insurance policies for everyone

Written on Saturday, September 19, 2015
By Narender Anand, Sr. VP & Product Head - GI, Bajaj Capital Ltd.

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Every other day you would find a new addition to the list of insurance policies available in market. It adds further confusion to the mind of policy buyers as in what plan to opt for as per their need. Insurance is a necessity and to ease out your selection process, this blog would guide you with five basic and must have policies.

1. Health Insurance

This should always top the priority list of your insurance needs as you never plan to fall sick or get hurt, but most of us would need medical care at some point. If you have a health insurance, it will cover these costs and offers many other important benefits.

-Health insurance saves you from unforeseen and high medical expenses.
-Pay less for covered in-network health care, even before you meet your deductible.
-Get free preventive cares, vaccines, screenings, and check-ups.
-Daily allowance to meet incidental expenses
-Avail cashless treatment at leading hospitals
-Payments made towards health insurance premiums are eligible for tax deductions under section 80D.

To make it cost-efficient, you should consider opting for a cover at an early age when you are young and free from medical complications. As you age your health cover cost will increase significantly and with age if you develop some medical condition, the insurers tend to exclude your pre-existing condition which defeats the prime purpose of buying a health insurance.

2. Life Insurance
Life Insurance is essential to protect your family against any uncertainties of life. If you are a primary bread winner for the family, insurance will help them to offset the lost income in case you are not around. If you are still single or have no dependents, you can delay it for some time.

-Your immediate family will have some financial support in the event of your demise. 
-Your child will still get education as you have always dreamed. 
-After your retirement, you would have a stable income source.
-It will ensure that you have an extra income when your regular earnings are reduced due to serious illness or accident. 

It is difficult to calculate the exact value human life in monetary terms, a sum is determined based on the loss of income in future years. In case of life insurance, the Sum Assured is by way of compensation.

3. Vehicle/Motor Insurance

Motor Insurance is a compulsion under the motor vehicle act, 1988 but more than an obligation it is a need. Opting of insurance for your car, bike or other vehicle is necessary as it not only covers the damage done to your own vehicle but also has liabilities of third party covered.

-It provides benefits to survivors in case accident results in death. 
-Covers lawsuits, including a legal fee that rises against you due to an accident. 
-Covers the damage caused by an accident.
-Also includes damage done by other than an accident for example, theft, fire, etc.
-Zero debt offers various other add-ons like consumables,tyre covers etc.

To control your premium for subsequent years, try not to go for small claims. If you do not file any claim during the insured period, you are eligible for a No Claim Bonus. This bonus will reduce the cost of your premium.

4. Property/House Insurance

Most often in India, we ignore insuring our house or other properties but if we look at it in monetary terms, it is probably the biggest investment done during our life and hence, it needs to be covered. By insuring property means- insurance of buildings, household items, stocks etc. against fire, burglary and other associated risks.

-It offers peace of mind, as you are not worried about the loss.
-It pays for damages, theft or deductions of your belongings.
-If your property is insured, you have a better change of availing credit against it.
-It protects your dream home against all kinds of man-made and natural perils like earth quake, floods, typhoons etc.

5. Personal Accident Insurance

We very often ignore personal accident insurance as we are told that it is covered under life or car insurance policy that you already have. A personal accident policy is a must for everyone not only to protect their families in the event of accidental death, but also to cover impairment, leading to loss of earning capacity. These policies are not expensive and can be availed at competitive premium rates.

-Benefits include accidental death, permanent/total disablement and permanent/partial disablement
-Total disability while travelling as a passenger in a public conveyance is also covered
-It compensates any accidental death or disablement happening anywhere in the world.

Personal accident cover should be availed by all adults, including housewives. Children between five and 18 are also eligible for this cover. We will also recommend young drivers to go for this cover. 

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