You may not care about your health, but you sure do care about your finances. With healthcare costs rising at more than 15 per cent a year, having a health insurance is becoming a necessity.
These policies are of three types -- the first covers basic hospitalisation needs; the second critical illness; and the third daily hospital cash reimbursements. Even life insurers offer health covers with defined benefits.
Under these, a pre-specified amount is paid as compensation, irrespective of the expenses incurred.
With or without a family, you need a health cover. For those who have a family, we recommend a family floater instead of a standalone policy since the probability of all family members needing hospitalisation at one go is remote.
Even if your employer offers group medical insurance, get your own cover. A change of job could leave you without insurance, and so could retirement. And, getting a fresh cover after 45 is difficult.
Accidents don't just happen on the roads. You may meet with one if you slip in your bathroom, or trip down the staircase in your office, or fail to see the next step in the darkness of a cinema hall.
One careless step could render a double blow to your finances -- your healthcare spending increases as you undergo treatment and your income stream gets disrupted until you recuperate. It is here that accident insurance plays a crucial role.
In India, you have two major options to cover the risk from accidents. First, are standalone personal accident insurance policies (PAIP) available with general insurance companies. Second, you can get it as a rider along with a life cover.
Accident policies only cover bodily injuries due to accidents, which are external, violent and visible, as the definition goes. It covers you for four contingencies that may arise from an accident -- death, permanent total disability, permanent partial disability, and temporary total disability.
Like benefits from all insurance policies, buyers need to understand how these contingencies are defined in the policy. When you go for a PAIP, opt for a comprehensive cover of the four contingencies even if you have the option of covering one, two or three of them.
Not having a cover for your vehicle is like driving one at night without switching on the headlights.
You need to compulsorily take a third-party insurance, or third-party liability cover, sometimes also referred to as the 'act only' cover, when you buy a vehicle. It is referred to as a 'third-party' cover since the beneficiary of the policy is not the two parties involved in the contract -- the insured and the insurance company.
It covers the injuries to a third person, or damage to the third person's assets. But, it is better to go for a comprehensive motor insurance.
You can negotiate for a discount while buying. Also, soon general insurers would be able to price the premium on the policy wordings.
As a buyer, you will need to understand how the wordings of the policy would affect your premium. Factors like the driver's age and record, the type of vehicle and usage could determine the premium in the future. For now, look for lower rates without compromising on any of the clauses or feature.
Always remember, to transfer your no-claim bonus to the new car, if you are replacing your old one. This way, you would be able to save 20-50 per cent on the first premium of your new car.
Receive the original policy certificate/cover note
For most Indians, buying a house is the most cherished dream and probably the biggest investment of life. Home insurance not only covers your dwelling against unpredictable events, such as a terrorist attack or an earthquake, but also your valuable personal property, such as consumer durables and jewellery.
The premium is less than 1 per cent of the actual cost of the contents or structure covered. You can also opt for a long-term cover by paying a lumpsum premium. In terms of cost, the policy gives you two choices -- cover against the present market value and against the reinstatement value, or the value at the time of the claim. Opt for the latter.
You can either opt for a standalone fire insurance policy (FIP), or a more inclusive householder package policy (HHP).
FIP only protects the building of your house against fire and allied perils like earthquake, lightning, storm, floods and riots. HHP, meanwhile, covers the contents of the house against burglary and mechanical or electronic breakdown, in addition to covering the building and contents against fire and other perils. HPP even offers other covers like public liability due to your negligence, personal accident (offers an income stream for the period you are temporarily disabled and a lumpsum payment in the case of death or total disability), workmen's compensation (covers you against injury or death of your domestic help) and baggage loss.
Remember, it's never too late to buy insurance. So, if you don't have the must have five, buy them now.