Mumbai: What can you buy for Rs1? Well, financial products such as personal accidental cover, life insurance and gold can cost as low as ₹1. Sounds too good to be true? Here we take a look at these products and tells you if it is worth it:
Last year, app-based taxis company Ola started providing insurance cover for ₹1. “The premium is priced at ₹1 to make it affordable. It is to hedge risks associated with travelling on the road," said a spokesperson from an Ola Cabs.
To buy the insurance, you have to pay ₹1 every time you take a cab ride. The in-trip insurance cover, in partnership with Acko General Insurance Ltd, within the city includes ₹5 lakh personal accident cover, Rs1 lakh hospitalisation benefit and loss of baggage. For outstation rise, the insurance cover includes emergency hotel stay and home insurance cover as well. To file for claims, the customer must first select the ride that they wish to claim the insurance amount for. “This feature is available in the ‘Support’ section," the Ola spokesperson added.
Last year, Indian Railways Catering and Tourism Corporation (IRCTC) launched a travel cover for less than ₹1. A circular released by the IRCTC states, “The premium, with effect from 1 October 2018, is 49 paise per passenger." After booking your train ticket, you will get the details of your insurance policy and you will have to update your nomination details on the insurer’s website. “If nomination details are not filled, the settlement will be made with the legal heir, if the claim arises," the circular added.
The policy is compulsory for children less than five years of age, and covers death, permanent total disability, permanent partial disability and hospitalisation. The maximum cover is up to ₹10 lakh, in which you get a cover of Rs10 lakh for death and permanent total disability, ₹7.5 lakh for permanent partial disability, ₹2 lakh for hospitalisation expenses for injury and ₹10,000 for the transportation of mortal remains.
Apart from private companies and the Railways, the government also provides a life insurance scheme – Pradhan Mantri Suraksha Bima Yojana – at a premium of ₹1 per month and ₹12 a year, which is debited from your linked bank account. It provides a cover of ₹2 lakh. You get paid a sum insured of ₹2 lakh in case of death, in case of loss of total and irrecoverable loss of both eyes or both hands or feet or loss of sight of one eye and loss of use of hand or foot and ₹1 lakh for total loss of sight of one eye or loss of use of one hand or foot.
Should you opt for it?
To begin with, ₹1 is a minuscule amount to spend for an insurance cover. But should you consider it? An insurance cover that costs ₹1 can’t replace your comprehensive insurance cover.
“The ₹1 cover offered does not substitute the need for a personal accident cover," said Anand Prabhudesai, founder, Turtlemint, an insurance web aggregator. Also it may not be adequate. “The hospitalisation benefit of ₹1 lakh may not be enough," said financial planner Suresh Sadagopan.
In case of the IRCTC cover, did you know earlier the cost was included in the ticket and only recently passed on the cost to customers?
“The railway ministry is not essentially offering anything extra. Earlier such covers were in-built, but now you are being charged 49 paise. Though the amount is negligible, the burden has been transferred to the traveller," said Pawan Agrawal, founder, Invest Guru.
When it comes to life insurances, ₹2 lakh is inadequate. “Generally a term cover is advised to be 10 to 20 times your annual income based on your requirement," said Prabhudesai.
“If you can afford a credible product, you must opt for it because it is not about how much you pay as a premium, but what you get out of the product," said Sadagopan. Hence, by an insurance with adequate sum assured cover.