Must-have covers for all seasons

Are you and your family insured against future exigencies? If not, then get started now. A few plans are what you need to get the essential insurance covers, and these don’t cost much. Here, we list five types of plans that take care of all your insurance needs.

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A term insurance policy is what you should begin with, preferably at the start of your professional career. It’s a no-frills, low-cost policy that comes with loads of benefits for your family in the event of your death. Ideally, you should buy a term policy with a sum-assured equivalent to 8-10 times your current annual income. You can add more term covers as your income rises or when the number of dependents increase. Metlife’s Suraksha, which offers a 30-year term, is ideal for early starters and is also quite reasonably priced. But most other insurers offer a 25-year term; many of these standard term policies are very competitive vis-a-vis market leader LIC in terms of cost. You can check out ICICI Prudential, Tata AIG, Bharti AXA for your term assurance needs.

If your dependents are young, they may need financial support at different points in their lives. For such times, you can opt for policies that offer regular payments. Rahul Aggarwal, Insurance Analyst and CEO of Optima Insurance Brokers, says: “One can opt for secure payout options in pre-determined installments (Tata AIG offers this facility) as a survival benefit, instead of a lumpsum benefit. A one-time receipt is usually a large sum, which many people are not equipped to handle judiciously. Besides, it tends to get dissipated or runs into disputes. Regular payouts are a better option.”

Take care of mishaps

Though people tend to ignore the need for an accident cover, you must buy one if you hit the road regularly or are a corporate jetsetter. But you should buy it separately— it’s inexpensive—and not as a rider in a life insurance policy. Says Ramesh Chordia, CEO of insuregain.com, an insurance service provider: “Accompanying riders in life insurance policies do not always cover permanent total or partial disabilities.”

But what should the size of the accident cover be? This depends on your income, since insurers usually restrict the sum assured to 60-70 times one’s monthly income. Always opt for the maximum sum assured, as it will stand you in good stead if an accident causes a major disability. “Opt for an accident insurance from general insurers,” advises Chordia. New India Assurance and Royal Sundaram offer atractive plans.

Don’t skip health cover

A healthcare plan for you and your family is a must considering that high medical costs in times of illnesses can severely dent your savings. Health plans can be expensive as all family members have to be covered. If you can’t afford the regular policy, you could consider a floater cover, in which the sum assured gets rotated among all those covered in the policy.

This works well if the family is young and healthy—the chances of everyone falling ill at the same time are minimal. Reliance General’s Healthwise policy has an attractive floater cover; Chola DBS, too, offers one. The basic healthcare policy offered by general insurers has its own advantages, as it covers the entire family on an individual basis with easy renewal cushion for senior citizens. If you can afford it, a second policy offering critical illness benefits and hospital cash benefits should also form part of your core insurance needs. “A daily hospital cash benefit plan allows additional expenses like food, entertainment of visiting relatives and other medical overheads,” says Aggarwal. A basic healthcare policy with a sum assured of at least Rs 4 lakh each is ideal. Reliance General’s Healthwise has some great plans, while Apollo DVK In-patient Hospitalisation offers higher sums assured compared to others.

In addition to the healthcare plans, you could also look at plans offered by life insurers for critical illness or hospital cash benefit covers. These offer a lump sum payment to the extent ensured and don’t ask for bills and also cover disability arising from accident.

LIC’s Health Plus plan offers daily cash benefit as an add-on. Says Chordia: “Depending on the profile of the insured, one can opt for either LIC’s Health Plus policy or ICICI Prudential Life’s Hospital Care cover. The latter covers a variety of surgical procedures and debilitating diseases on account of old age, while LIC’s Health Plus also allows for a ULIP-like savings component for healthcare requirements outside the claim purview.”

Chordia also recommends Reliance General’s Healthwise Plan that offers a double sum assured on nine critical illnesses at a reasonable premium over and above the basic policy. For those who can afford only one health policy, the last one is a great option.

Secure your home, too

Your home is a very important asset that must be insured against damage and theft. Says Aggarwal: “Theft is increasingly becoming a major menace. Flashfloods, earthquakes and fire accidents, too, now occur more frequently due to climate change.” It doesn’t cost much to buy a home insurance plan, also known as Householder’s Policy or Comprehensive Home Insurance.

The premium works out to as low as Rs 2 per day depending on what is being insured. Besides, the benefits are great, too. For instance, the Householder’s Policy has a section on fire insurance that covers damage to the house (structure or building) if it collapses due to an earthquake or develops an undesirable crack; it has another section that covers theft of household articles as well as damage from various causes, including natural calamities.