What are the important “general insurance” policies to Be taken?
Without health insurance, getting sick or injured could mean going bankrupt, going without needed care, or even dying needlessly.
Your lives are always full of excitement and risks at the same time. However, some unforeseen situations and uncertainties can sometimes put you in both financial and emotional tension. I urge you to safeguard your belongings like your car, home, then, buying a general insurance policy is a great option to embrace the financial consequences. Financial loss arising out of natural calamities, accidents, casualties apart from death, legal actions and thefts, are also handled under various general insurance policies. I have experienced that general insurance compensate you for financial loss due to liabilities related to your house, car, motorcycle, health, travel. The insurance company promises to compensate for the damages to your vehicle, or medical treatments, losses due to theft or fire or could be financial problems during travel.
Plainly put, a general insurance offers financial protection for all your assets against loss, damage, theft, and other liabilities. It is different from life insurance.
Have you been confused about the various kinds of general insurance policies?
What are all the type of insurance that you must have?
Have you got many offers on insurance?
Massimo Vignelli, the famous Italian designer said- The first thing you need to make clear to a client is that you aren’t there to answer his wants but answer his needs.
Have you wondered about the best general insurance policy? Have you thought about the best price or the best-featured insurance policy?
If your answer is yes, then this chapter is for you.
Research says that 91% of people worldwide never went out and bought any insurance policy?
They were sold to you!
I shall be covering the top and most significant general insurance policies. For the purpose of individuals and families only.
These are the essential ones that you must buy, before making any investments, on your journey to riches!
- BASIC HEALTH INSURANCE
- PERSONAL ACCIDENT INSURANCE
- CRITICAL HEALTH INSURANCE
- HOME INSURANCE
- YOUR CAR INSURANCE
- TRAVEL INSURANCE
You need to understand the basics of the policies, and why should you take them? I shall endeavour to explain only the salient features here. The attempt is to align you with the most significant reasons for the plans.
Basic Health insurance
This type of general insurance covers the cost of hospitalisation only. It reimburses the amount of expenses insured by you for the treatment of any injury or illness in a hospital. It covers hospitalisation, treatment of critical illnesses, all the
bills for tests, doctors’ fees, and medicines up to 30 days before and up to 60 days after the hospitalisation; specific day-care procedure like cataract also. More advanced versions may cover maternity and pre-existing diseases also.
With ever-rising medical cost, inflation (for the purpose of healthcare) is around 15%, as per my study from 2001 till 2019.
My research reveals that you should cover yourself and your family for all medical exigencies for the maximum coverage that you can comfortably afford! This coverage should go on increasing automatically by 10% every year.
So, every five years, remember to increase your coverage by 50% if it doesn’t happen.
Take care of the following most essential criteria while choosing your primary health insurance policy:
- If you are a family of two or more, then take a floater health For example, Rupees Ten lakhs coverage for an average family is the essential minimum recommended today in 2019. Calculate the average expenses involved in any major surgery like heart operation at a major hospital and prepare for it financially.
- Ensure that the policy has no capping on room rent, or capping on any surgery or excludes anything. No sub-limits. No co-pay (it means that you should not be asked to pay a partial amount and that the insurance company only pays the balance amount).
- Please choose the best health insurance company for the best features it
- Look for the claim settlement ratio. Do your research and come up as the best health insurance stand-alone Choose the appropriate plan based on what and how the claim would get settled. Do not try to save cost today for the future expense may hurt you 100x times more than what you are trying to save. Remember to avoid shortcuts today!
5. Understand what the exclusions are and what all diseases or costs will not be covered.
6. For logging a claim, what is the standard procedure and what all documents would be necessary, if and when that situation arises? Keep them (Keep photocopies of all such documents uploaded in your cloud storage and copies in your run away folders-discussed in a later module). Check their toll-free number and call to see if it works 24 hours, and human picks up your call.
7. Never have a priority to go for the cheapest! After all, you would like to go for the best treatment and best hospitals, when the need arises.
8. Declare all your previous illness history and all relevant medical situations. Do not hide any material facts and essential information while filling up the application Disclose all such information to the competent advisor and discuss whatever he/ she needs to mention in the form. It is essential to consider all such information, before even selecting the appropriate plan.
9. Check the application form Never sign an empty form and always insist on a copy to be sent to you before it gets formally submitted to the insurance company.
10. Discuss with your financial planner or advisor all the alternatives available with the insurance company, given your above family There may be some expensive policies, but more suitable plans, which you may first ignore. So, do not overlook just because of their higher cost!
11. Advanced features or top-up may be offered, but you must select wisely:
a. Consultations offer.
b. Pharmacy and diagnostic expenses.
c. No waiting period.
d. Inpatient treatment.
e. Costs for an organ donor.
f. Emergency ambulance.
g. Air ambulance
h. Cashless services are now available as standard offers.
12. You get the benefit of income tax while buying this policy; up to Rupees 25,000/- per Under section 80D of the Income Tax Act. (Tax benefits are subject to changes in tax laws). An additional Rupees 30,000/- benefit comes to you if you are taking this health insurance policy for your parents. This goes up to Rupees 1,00,000/- if you and your parents are above the age of 60.
13. Portability: it gives you the option to port your existing health insurance policy to a better plan. You will be able to carry forward the benefits of the earlier policy so that there is no waiting period.
14. Proper documentation and the right choice of the insurance company, will give you that peace of mind that when the need arises, you would not be financially hit, by any significant That future expense may hit you badly and set you back a lot on your journey to riches. It would be best if you did not have to sacrifice your savings and investments in your entire lifetime, for this reason.
Think. Plan. Buy appropriate basic health insurance plan today.
Before you make any investment plans, make sure you have this plan in place.
ii. Personal accident insurance
Surprises in Life can be exciting!
They can bring in blessings! Diwali, New Year, Holi and other important festivals and events, bring so much joy and happiness to our lives. We make plans for the expenses involved also.
Sometimes blessings expected may lead to unforeseen circumstances!
They can be fatal or financially wrecking too! Diwali brings the fun of crackers, but one going in the wrong direction can misfire, leading to a major fire also.
New year celebrations can lead to a road accident and major eventualities.
Did you know that 1.5 lakh people died in road accidents in India in 2017 or 400 deaths happened per day!
Three people die every minute in India due to road accidents.
55% of accidental deaths occur due to traffic!
21% of all deaths are due to accidental drownings/fires/ fall.
One in four accidents leads to disablement!
Nine in ten accidents lead to injuries!
The loss of your livelihood can be temporary, if not permanent!
Life can be full of surprises. It doesn’t mean that we stop living our dreams!
I want you to go and enjoy life, its planned events and let all the happiness come.
However, Live life carefully! Be fearless while being carefree. I want to prepare you for your family’s future.
Enjoy each moment in life, fully prepared so that every planned joyful event doesn’t lead to a sad event. Take up all those adventures as you wanted to take up. How do you take care of all those uncertain surprises, that life may bring you!
How do you get back on track, should anything happen?
In this chapter, I am focusing on those eventualities that may set you back financially, while you are still alive. You live. Continue to live, but are disabled to earn the same income, as before! You have to live but cannot foresee the financial consequences of a major accident. An accident that may cripple you and leave you unprepared. Unprepared for that continued financial stream of income, as before that event.
A personal accident policy gives you these unique benefits to overcome that financial difficulty from your life’s unexpected events.
These benefits are:
- Treatment expenses from permanent total disability (loss of eye, hearing, speech) and getting a significant lump sum this is important to tide over the consequential income future loss.
- Permanent partial disablement: to get a significant lump sum amount.
- Income support for temporary total disability.
- It protects your financial liability with a secure loan benefit.
- Takes care separately of your accidental OPD expenses.
- Supports your income when you are down with injuries due to an accident (like fracture or burns).
- Adventure sports leading to an accident.
- Covers road and air ambulance.
- Take care of lost income while in a coma.
- Transport of importedmedicines.
- Purchase of blood.
- Family transport expenses should include your family if they have to reach you, when you were hit, in an accident.
- Modification of residence or
- The cost of Prosthetics.
Of course, the same policy covers you by giving you a lump sum amount for accidental death, cremation ceremony and for transportation of mortal remains.
Check for worldwide coverage, 24 hours, 365 days.
To conclude, my idea here is to help you face life’s uncertainties with courage, wisdom and the right plan.
Securing yourself in this way leads you to plan for all eventualities due to accident.
Falling off a bicycle, or a snake bite or fracturing your leg while playing football can lead to a temporary inability to earn.
Capping those circumstances, for financial implications, gives you happiness and joy. The satisfaction of being prepared for the worse makes you worry-free.
That is itself Financial Freedom.
To be able to enjoy those precious moments with your family.
To take up all challenges of life. Be happy.
Be Prepared for a prosperous and wealthy life.
Part-iii: critical Health insurance
Have you ever thought about how your life would change, if a life-threatening illness, is diagnosed?
While going to the office, if you had a stroke, and you survive?
What if you were diagnosed with cancer or had a heart attack while sleeping? How would your lifestyle and working be affected, after such a prolonged illness? As a consequence, you may not be able to work in the same manner as you did before?
Would it, therefore, affect your earning capacity? Hence, your
financial goals would also get affected?
To tide over such events in life, it is recommended to have a good critical illness insurance policy. It would help if you took a stand-alone policy, which should give you a regular income.
It should supplement your income because you cannot work, or perhaps cannot in the same manner as before.
On your journey to achieving a wealthy contended life, do not leave life’s critical bits uncovered. It is advisable to protect yourself against top critical illnesses.
Research says that, when someone is diagnosed or faces such a tragic illness, they often travel into survival mode!
They stop thinking of these things, but the reality is you need to.
Moreover, it’s better to plan for this than to have the outlook of “this won’t happen to me”. “Sometimes, the smallest step in the right direction ends up being the biggest step of your life. Tip Toe if you must, but take a step.” – Naeem Callaway
Why would you need it?
Today we endure in a fast-paced and progressive world that sometimes takes away more than it gives. Changing lifestyles are making Indians increasingly fall prey to the non-communicable critical illnesses such as malignant neoplastic disease, heart attack. These critical illnesses are linked with an increased cost of treatment along with a long and expensive recovery process.
A primary health insurance policy may not be sufficient to handle all medical expenses, especially in case of critical illness which require a long term treatment. This financial burden needs to be backed up by a specific financial protection plan.
A critical illness insurance policy coverage is a unique policy that protects you financially in the case of any of the listed critical illnesses occurring.
Illnesses that should be covered
Caution: While you consider taking this policy, please do read the policy wordings and understand the primary conditions like:
You have to survive a minimum of 30 to 90 days post the diagnosis for illnesses listed under various categories.
On the first diagnosis of the covered critical illness, the insurance company will provide, a lump sum amount of sum insured. There is no death benefit provided.
iv. Home insurance
Your house is made of walls and beams, while your home is, perhaps, built with love and dreams.
You have worked harder, saved every rupee to give yourself and your loved ones the security of a habitation. A house that they could call your own.
Purchasing a home is the single most significant investment for most people.
It is a Herculean task that implies a lot of planning, saving and research.
A survey by the National Disaster Management Authority says that 60% of the Indian landmass is prone to quakes and 8% susceptible to cyclones! With the increase in natural calamities, would it help to take up a little expense, to avoid a substantial financial setback in the future? You may think that it is a dissipation of money as it is a certain investment in an uncertain cause.
Nonetheless, with the increase in natural calamities, it is a good idea to take up a little expense to avoid a substantial financial setback in the future. It may help to secure your most valuable asset from any possible kind of natural or man-made calamity. Furthermore, it also protects you from liability lawsuits like property-related lawsuits. Some home insurance policy may cover the unfortunate incident of you accidentally damaging some else’s property, like in the event of a fire or mechanical damage.
Isn’t your home a place where you and your family rejoice, you weave so many memories, which last for a lifetime. While you put your life’s savings into buying or constructing a house, but you don’t realise that your house may need protection also. It would help to invest in a good home insurance policy, also referred to as homeowners insurance. Burglary, fire, earthquake, cyclone, flooding or destruction of a house due to riots are quite usual in India. Why should you wait for a calamity to remind you of the need of buying home insurance, opt for it ahead!
Some of the main points to remember while insuring your home are:
- The basic insurance coverage of your house has three components:
- the building and
- the locality costs.
Your insurance will cover only the building cost.
- Insurance Coverage decision: This is an important point that people forget while taking their home insurance and waste a lot of money for years. Let’s say that if the market value of your house is Rupees two crores, of which the building cost is Rupees sixty lakhs, your policy will insure only Rupees sixty In case of a claim, the insurance company shall pay only for this amount! Then why should you waste your money on a premium for covering Rupees 2 crores!
- The public liability cover is an add on feature that compensates you against any compensation during litigation due to property damage, or any bodily injury of any third Additionally, it will also compensate for the medical expenses of a guest injured on your property.
- Baggage coverage compensates you for any loss or damage or theft of your baggage while you travel anywhere in
- An impressive coverage is when you are robbed of cash, when you withdraw money from a bank branch or an Automated Teller Machine (ATM), on your way back home.What I have covered are the do’s and don’ts only. I have tried to explain that you must take home insurance with the above features so that any such substantial financial loss, doesn’t set you back financially. Any such eventuality should not burn a hole in your pocket, that is now full of dreams.Your dreams and ambitions, to secure a prosperous and wealthy life for your happy family, should not be shattered.
A comfortable home, maybe your sweet home, stay secured in there!
V. Your car insurance
Did you buy that expensive, luxury car as part of your dreams?
On your journey to be an affluent person, that car is, perhaps, your second love!
You will spend any amount of money for its upkeep and maintenance. Therefore, its insurance is no longer a formality for your expensive car’s upkeep and maintenance! It is also the legal minimum to have your car out on the road.
While you invest your best in eyeing that perfect car, do you invest your best to get the perfect cover to protect your vehicle against financial liabilities arising out of unforeseen contingencies?
It is meaningless, to be penny-wise, pound foolish! Just a brief summary of recommended coverage:
- Loss of or damage to the
- Liability to third
- Personal accident cover for owner-driver.
Furthermore, I recommend another 13 add-ons to choose
from to give your all-round car protection:
- Depreciation reimbursement.
- Return to invoice.
- Daily allowance.
- Emergency transport & hotel expenses.
- Road Side Assistance
- Continuation/Return Journey and Courtesy/Hire Car.
- No Claim Bonus Protection cover.
- Key Replacement Cover
- Loss of personal belongings.
- Consumable Expenses
- Tyre Secure
- Engine Secure
- Electrical/Electronic Fitting.
Your second love gives you two things – independence and freedom of movement. To further make your driving experience, it would be great to have a third ingredient, peace of mind. With proper car insurance, stay protected and cruise without worries.
I have chosen the top features to consider while finalising your car insurance.
An important suggestion is to try not to save money on premiums. Spend on the best features. Indeed, you are a rich person.
iv. Travel insurance
Travel abroad would be a part of your dream!
Making it an enjoyable and memorable journey would be your endeavour.
You may travel solo, with family or on a business trip, you want to make it peaceful journey.
All your journeys are as extraordinary as your destinations!
To take care of you and your family against any adverse situations, be it medical or any trip inconvenience, it is suggested to have travel insurance.
That annoyance of getting your checked-in baggage getting lost in transit by an airline should be well compensated.
Meanwhile, an insurance company should pay for the following:
- Your losses and damages in the event of a burglary or attempted burglary at your home while you travel.
- Reimbursement should be there for the expenses incurred to get a duplicate or new passport, in case it gets lost.
- To get paid distress allowance.
- For the unauthorised use of a lost payment card, prior to your first reporting during the
- Due to any bounced bookings of hotels and airline.
- Loss of passport, baggage, or documents.
- Health problems: No one wants to fall ill while on However, medical complications or a serious bodily injury could arise at any time; This also includes dental treatment because it’s entirely understood that when you’re in a new place, stopping yourself from going on the sweets can be a little difficult.
- Flight cancellation or delay financial loss compensation.
- Emergency medical evacuation.
- Fraudulent charges: Imagine losing your credit/debit card while you are on vacation and you start getting texts that someone is using Scary, right? Not only are you losing your money, but you are losing money in a place where you might not even find help quickly. Your policy will refund you for the money lost through stolen payment cards for up to 12 hours before your first reporting of the incident.
- Any compensation for accidental death or injury
- The expenses for transporting the body, from the place of death to India.
With these have must insurance, I promise you that you are adequately covering your journey to riches.
Ensuring that you and your family have sufficient coverage for financial losses, these ideas make you enjoy life in abundance and joy.
Making it worry-free is also a concept of leading the life of a rich and wealthy person.
I also urge you not to negotiate and ask your financial planner or insurance advisor for discounts or reducing the premium. That’s the whole point. Not bringing down the chances of having an abundant life, but making it secured also.
Money cannot buy happiness, but should ensure its safety and security- in terms of it happening as you dreamt of!
I have seen some people ignoring such must have insurance, just to save some money, but they fail to see the long term repercussions.
These financial sureties, make your dreams happen, without any man-made hazard or a natural calamity destroying your dreams.
Now that you have learned the why’s and where’s of insurance, let’s soak in the mechanics of Mutual Funds, the most talked-about investment platform.
Taressh Bhatia is a CFPCM CERTIFIED FINANCIAL PLANNER CM and is the founder/partner of Advantage Financial Planner LLP – A firm Registered with SEBI (Securities and Exchange Board of India) as RIA (Registered Investment Advisor).
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