The basic purpose of insurance is protecting your most important assets be it your home, Insurance Policies shop, life or health. Insuring your future earnings through insurance is one of the most important financial steps towards building healthy financial future. Insurance market is full of insurance products with verity of coverage and sizes boasting different features in lowest premium. In such situation, the insurance buyers often get confused choosing products that they really need. Most of us take insurance as a tool for saving income tax. But this is the worst thing we do so far financial planning is concerned. The best way to get rid of this situation is educate yourself; using different websites available or can seek help from your financial planner or agents.
As insurance need is completely personal, and vary person to person, you first determine your insurance needs. And in this regard, your financial planner will play an important role. Like other things, buying of unnecessary insurance products too is wastage of your hard earned money only. Suppose you don’t have any financial dependents, and you choose to buy a term insurance policy. Is it a right purchase? Unquestionably it’s not an informed decision because no one will get benefits out of it.
Keeping buyers needs and confusions in purchasing insurance products in mind, I’m listing some important insurance policies everyone should have.
1. Term Insurance Policy
If you have financial liabilities, such as financial dependents, loans etc. you must take a term insurance policy of adequate sum insured; because you’ll never want your loved ones to pay your debts when you’re gone. The purpose of a term insurance policy is not providing financial cushion to you but to protect financial future of your family if you’re not around. Have you ever thought what will happen to your children if something unfortunate happen to you? Will they be able to continue their education? A term insurance policy assures their good financial health. You must take a term insurance policy also because it provides the simplest cover.
2. Health Insurance Policy
Considering the rising cost of health care, health insurance policy is another handy financial product to buy. Even one minor accident or illness may result into huge financial crisis. For most of us, getting quality health care without having a health insurance policy is not affordable. Illness that requires surgery can quickly rack-up huge amount leaving you in miserable financial health.
So it’s strongly advisable to take health insurance cover at your early age when you are in better health shape. Premium rate is also less when you are younger and good health.
As per the India Motor Vehicles Act 1988, it is mandatory to have ‘third-party liability’ cover to all vehicles plying on public roads in India; while ‘comprehensive cover’ is made optional. However, buying ‘Comprehensive Cover’ for your vehicle gives up complete peace of mind. A ‘Comprehensive Cover’ insurance policy along with providing protection against financial losses to you it also covers liabilities for injuries, damages to others caused by your car.
4. Personal Accident Insurance
This is one of the products that most people do not think useful, and therefore, seldom go for it. But reality is that accident can happen anytime and anywhere. a Personal Accident Policy is meant to provide financial assistance should you be disabled and unable to work meeting after an accident. The unique feature of Personal Accident policy is that it replaces your income when you become disabled, maximum for 2 years. Besides, like term insurance policy, it also pays out death benefits to your family if something unfortunate should happen to you.