5 Insurance Covers That Anyone Must Have..!

If you do not have these 5 covers, use the festivals as an opportunity to set things right

If you have these 5 essential covers, you need not worry; but if you do not, use the festivals as an opportunity to set things right.

1. Life insurance..!

This life 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 insurance cover yet, opt for a term cover, and an online one at that.

If you die during the term, your nominees get the sum assured. But if you survive the term, you get nothing back. The ideal sum assured is 10-12 times the annual income; if there is a house loan / personal loan, get a cover for that amount as well.

2. Health Insurance

Healthcare costs are astronomical & emergencies can crop up any time. Therefore, health insurance cover for the whole family is a must.

Even if your employer (Working Company) offers group medical cover, it is 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 & also reimburses expenses incurred before & 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 lakh to Rs. 5 lakh for an individual is important.

You can supplement the health insurance needs with defined benefit plans, like a critical illness plan

3. Personal Accident Cover..!

This cover offers financial compensation if you meet with an accident. This policy comes with 4 covers:

1. Death,

2. Permanent disability,

3. Permanent partial disability and

4. Temporary total disability.

Opt for a comprehensive plan that covers all 4. Typically, the maximum cover you can get is 10 to 12  times your annual income.

4. Motor insurance

In addition to taking the mandatory 3rd-party cover, you need to cover your car against any damage. A comprehensive car insurance policy covers not only your liability towards a 3rd 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 3 important ones are:

1.depreciation cover, 2. return to invoice and 3. 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 25% to -50% on the first premium.

5. Householder’s insurance

It not only insures your house, even if rented, against unpredictable events, like as an earthquake or /  a fire, but also your valuables like consumer durables & jewellery.

It also insures against burglary, theft & 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 & 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.

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