An increase in lifestyle diseases has made it vital to buy a critical illness cover. Diversify your insurance portfolio beyond health and life insurance policies.
When it comes to buying an insurance policy, most of us stop at buying life insurance and then at best, a health insurance policy. That is also partly because not everything you need would be aggressively sold to you or is advertised. A major reason why some products may not be sold proactively is that these may not be working for the distributor. She may not be finding it economically viable or lucrative to canvas for such products. Sometimes you may have to go to the proverbial well, instead of the well coming to you when you are thirsty. Especially when it comes to financial risk management, it is important not to depend on sales calls alone.
In the first part of this story, we discussed why it’s important to buy a critical care insurance policy and a home insurance policy. Today, we focus our attention on three other crucial insurance policies.
Personal Accident Insurance
Accidents don’t tell and happen. And, if you get disabled due to an accident, it can have a lasting and permanent impact on your family’s finances. You might not be in a position to earn, and there will likely be a lot of additional expenses to help you get used to the new lifestyle and manage mobility.
This could include modifying your home (build ramps), modifying your car, hiring a personal helper (nurse), buying assistive devices such as a wheelchair, etc. In addition to these, you might need physical therapy, rehabilitation care and treatments in the long-term - that your health insurance wouldn’t essentially cover.
A personal accident insurance plan covers these costs.
What does a personal accident insurance policy cover?
A personal accident insurance policy provides compensation and covers three types of disabilities.
Total and permanent disability - where the insured person suffers from significant, irreversible damage impacting their ability to earn or live a regular life.
Partial and permanent disability - where the insured person suffers from partial, but irreversible damage that impairs his ability to live a regular life to a large extent.
Total and temporary disability - where the insured person suffers major damage to his body, and is unable to live a normal, independent life - for a temporary period of time.
Some policies also offer a death benefit if it occurs as a result of an accident.
How much does it cost?
The premiums of these policies will depend on your profession categorised under a specific risk class, but they are generally inexpensive. For instance, a policy of Rs 15 lakh that covers accidental death, permanent and temporary total disability would cost Rs 3,540 inclusive of taxes for risk class-3. The same plan, however, would cost only Rs 2,213 including taxes for risk class-1.
Based on your profile, insurance companies will specify the minimum and maximum limit of the sum insured that you can buy. You can choose a suitable coverage within the specified limits.
Two-wheeler Insurance
This is one important policy that most of us are aware of, at the back of our minds, but don’t buy because they’re not actively sold in the market. A two-wheeler insurance policy provides a cover to the vehicle owner for a variety of things such as accidents, thefts and any serious damage to the vehicle. There are two types of two wheeler insurance plans.
Third party covers: Plans that cover damage limited to the financial losses and injuries caused to a person other than the owner or passengers on the insured vehicle, or their property. Since these plans only cover third-party (that is, the person other than you) costs - they are considerably low-cost plans.
Comprehensive plans: Plans that offer extensive financial protection against situations such as total loss of the vehicle, or theft in addition to covering third-party losses. Optional riders for personal accident covers are also sometimes offered with such plans.
Why is it needed?
The government has made it mandatory for every person who owns a two-wheeler to at least buy a third party insurance policy - so it is really a matter of law that you must have a two-wheeler insurance cover. Also, theft of bikes is very common in India. On top of all this, if you ride a bike daily, you’ll know how difficult it is to navigate the streets of our country - and that accidental damage is common. So, you must consider buying this policy to protect your vehicle against such financial losses.
How much does it cost?
The premiums of a two-wheeler insurance policy may vary from Rs 1,500 to Rs 25,000 depending on the make and model of the two-wheeler, and whether you’re choosing a simple third-party cover or a comprehensive cover.
Cyber Insurance
Cyber insurance is a type of insurance that provides protection against internet-based risks such as phishing scams, data loss, cyber-attacks, etc. Not only does it help in minimizing these potential risks but it also provides you compensation in case of any financial loss.
Why is it needed?
Along with an increase in people working from home, shopping/ making payments online, and everything becoming digital - cyberattacks have skyrocketed too. And if someone breaks into your internet-connected device like your laptop or smartphone and alters, destroys, exposes, or steals valuable and confidential data like your passwords, net-banking details, etc. it can cause you serious, irrevocable financial damage.
A cyber insurance plan can protect you, effectively against such damage. Also your old parents with a smartphone in their hand may be caught in a cyber fraud ignorantly. But you must remember that a cyber insurance policy comes with a list of exclusions and inclusions and you must carefully check such lists before signing up for the policy, so you’re not taken by surprise at the time of a claim.
How much does it cost?
The premiums of a cyber insurance policy are fixed based on the type of loss you want to cover. Generally, the cost of this policy is very low and affordable. For instance, a basic cover of Rs 50,000 from Bajaj Allianz Cybersafe could cost as little as Rs 662 whereas a cover of Rs 1 crore from HDFC Ergo - e@secure would cost around INR 14,273 per year.
Summing, no one knows what the future holds. There’s always a possibility of us getting disabled due to an accident, a burglar breaking into our house and stealing valuable items, a hacker hacking our mobile/ laptop, or getting diagnosed with a critical illness. So, to protect yourself against such unforeseen risks you must buy the policies mentioned above.
