Insurance covers that you must have
Here is a look at five must-have insurance covers
This 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 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 8-10 times the annual income.
Healthcare costs are astronomical and emergencies can crop up any time. So, health cover for the whole family is a must. Even if your employer offers group medical cover, it’s better to get your own. Start with an indemnity policy; it pays for hospital bills and also reimburses expenses incurred before and after hospitalization. You could either buy it for each family member or a floater policy.
This cover offers financial compensation if you meet with an accident. This policy comes with four covers: death, permanent disability, permanent partial disability and temporary total disability. Opt for a comprehensive plan that covers all four. Typically, the maximum cover you can get is 10 times your annual income.
It not only insures your home, even if rented, against unpredictable events, such as an earthquake or a fire, but also your valuables such as consumer durables and jewellery. It also insures against burglary, theft and 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 ₹ 1 crore and you take a cover of ₹ 50 lakh. If you make a claim of ₹ 10 lakh, the insurer will only pay ₹ 5 lakh.
A comprehensive car insurance policy covers not only your liability towards a third 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 three important ones are: depreciation cover, return to invoice and 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 20-50% on the first premium.
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