I have car and home loans and my total EMI outgo is 60,000. I wish to insure myself in case I get hospitalized or meet with an accident and I am unable to work for a brief period or upon my death. What kind of insurance policies can I take to ensure the loan burden doesn’t come on my family? How much will they roughly cost?

—Shrey Jha

You are essentially looking for supplementary insurance for income replacement. There are four products available for income replacement. In each of these products, the level of payouts can be chosen based on the individual’s income. These are fixed-benefit products, so the payouts are made irrespective of any other insurance policy that you may have.

The premium rates vary by age and other add-on benefits you choose. We have given ballpark premium rates for a 35-year-old insured male for the four products that can help protect your income in different scenarios.

The first product is a hospital cash policy. Standard health insurance covers hospitalization expenses, but doesn’t cover non-medical expenses, and loss of salary due to unpaid leaves. Hospital cash gives a daily allowance for each day of hospitalization to cover such expenses. For a sum assured of 1,000 for 30 days, the cost would be around 350 plus taxes. The second is critical illness insurance. This pays a lump sum after one of the listed critical illnesses is diagnosed, subject to certain conditions. A critical illness can render a person out of work for a long period of time. So higher sums assured are available under this plan. Coverage of 1 crore would cost around 30,000 plus taxes.

The third product you can consider is personal accident insurance. This pays a lump sum in case the person suffers a disability or dies due to an accident. In such plans, a sum assured of 1 crore would cost around 12,000 plus taxes.

The fourth is term life insurance. In case of the insured’s death, either accidental or natural, the plan pays the full sum assured. A sum assured of 1 crore would cost around 15,000 plus taxes.

Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries and views at mintmoney@livemint.com

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