Three Insurance covers you must have

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The recent Uttarakhand tragedy has prompted many individuals to review their insurance cover and also do a reality check on their contingency arrangements. While this behaviour is not new, it's quite natural for most of us to react only after a particular tragedy, rather than being prepared in advance. A holistic financial plan takes into consideration the planning for contingency events as well as risk management. It's not advisable to start investments first without providing adequate protection in terms of relevant life and health related cover.     Today, there is definitely more awareness about the need for insurance protection than there was a decade back. But still the feeling that "nothing will happen to me" plays in the mind of most people and unless some close family member or friend is hit by a tragedy, the seriousness does not set in. In order to protect yourself and your loved ones from the uncertainties of life, there are certain insurance covers that one should have. Let us take a look at some of them.   Personal Accident Insurance:   People who are very young and fresh into their new jobs, should ideally buy accident insurance first. At the young age the chances of an accident are higher than any major illness.   You could argue that there is no need for such a cover if you are young since your parents are most probably working and have their own income. But in case you meet with a serious accident that results in a permanent or partial disability or an accident due to which you may be unable to get back to work for a prolonged period of time, then you would be dependent on your parents. In such a situation an accident cover will at least provide you with some kind of compensation. It will offer some financial support to meet your expenses Even for those who commute to work or travel long distances for work purposes, it is advisable to have adequate personal accident insurance.   The premiums are reasonable with a cover of ₹ 25 lakh costing around ₹ 3,000 per annum.   Health Insurance:   Many people who are covered for health insurance through their employers, do not feel the need to take a separate health cover for themselves. They ignore the fact that at times the hospitalisation expenditure can exceed the cover provided by the employer. There also chances that in case of a job loss they will be without a health cover. So, even if you are covered by your company, it is advisable to take an additional health insurance to supplement it. If not a second health insurance policy, you can take a top policy, which will kick in once you exhaust the limit of your primary policy, which is the one provided by your employer.   In addition to this, if you have aged parents, it is advisable to take health insurance cover for them early.   But most of think us of covering our parents only when they actually suffer from some ailments. Or if we hear about the high hospitalisation charges when someone else among our family or friends being hospitalised.   So, by the time you actually start looking for an ideal insurance cover for your parents, they could already be suffering from some ailment or illness, which might not be covered due to its pre-existing nature or may get covered only after a specific period. Fortunately, today there are a number of health insurance products which caters to the senior citizens category. Look at such policies, since one cannot afford to compromise as far as health is concerned.   Life Insurance:   Even today we come across people who have several life insurance policies, but the total cover is minuscule. In case of an unfortunate event with the main bread earner, the family's existing lifestyle may get affected. Several people carry a lot of liabilities such as home loan, car loan, etc. which also need to be factored in while estimating your required insurance cover. The thumb rule for buying a pure life term insurance is that the cover should be 10 times your annual income.   Earlier premium for a huge insurance cover was quite high. But today with several insurance companies offering pure term insurance products, taking an adequate insurance cover has become economical. With severe competition among life insurance companies, the term insurance rates are further coming down. The earlier in life you buy insurance, the cheaper it will be. As you age, your premium will rise.   Once you have taken care of the above, there are other areas where you can consider buying insurance, for example, insurance cover for vehicle, home contents, etc. Remember that every day we face uncertainties and therefore it's better to make a quick assessment of where you stand and buy adequate insurance covers rather than wait for some tragedy to take place.

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