With so many serial blasts and terrorist attacks all over the country, there is a sense of insecurity. Uncertainty prevails—be it life or property. And that gives you enough reason to take steps to secure the future, at least financially. To protect yourself from the repercussions of a terrorist strike, you need adequate cover for your life as well as assets. Here’s a list of insurance covers that you must have in these uncertain times.
COVERING YOUR LIFE
The risks that your life carries are death, hospitalization and physical impairment. Accordingly, you need life insurance, health insurance and personal accident cover, respectively, for the risks.
Life insurance: How much life insurance you need depends primarily on the number of dependants you have, and the amount of liability, such as loans, that you carry. It would also depend on estimating how long your dependants would take to start fending for themselves.
Says Pune-based financial planner Veer Sardesai: “Typically, you need to calculate the living expenses of your dependants and multiply the amount by the time period you think they would need the money. This is after you have accounted for all your liabilities.” After arriving at the figure, you need to look for a policy that can give you the required cover at the cheapest possible price. The market offers several plans, ranging from a pure term to investment plans such as a traditional endowment plan and unit-linked insurance plans (Ulips).
Our choice is the term plan, as it works out to be the cheapest and simplest. You just pay for the cover and the policy pays in the event of death.
Also See The Must-have Covers (PDF)
However, the most popular plans in the market right now are Ulips, that expose your money to equities while covering your life. If you are opting for Ulips, you need to read the fine print and carefully compare these before you lock yourself into one. There is still a lack of flexibility in Ulips; they are marred with mis-selling and aren’t the cheapest option.
Health insurance: A standard health insurance policy that takes care of your hospitalization expenses is a must-have. However, do check with your insurer if it provides cover for hospitalization on account of any act of terror. While most insurers cover you against terror attacks, there could be some who don’t. Read the permanent exclusion clause carefully.
If you have health insurance from your employer, you might not have to worry about this clause. Group insurance policies insure risks that individual policies don’t, since they have the option of tailor-made policies with the insurer.
However, it would be prudent to check with your employer too. Other health policies, which have defined benefits such as critical illness and hospital cash benefit, could be bought as top-ups.