Fear is what makes you live,
But let’s you take more than what you can give,
Like a butterfly who respects a cocoons essence,
Fear not; shelter yourself with an Insurance…
Insurance is the first step towards a healthy investment. It not only provides a safety net for your family while you walk the tight rope, but also protects your investments, in case of health contingencies. By Insurance, I mean only Life Insurance and Medical Insurance, and not insurance linked investment products.
Who needs it?
We all want to live forever with our loved ones, but that is one wish no genie can grant! So if you want to ensure that their dreams come true in your presence or absence, you must buy a life/term cover. Life Insurance is also essential to cover any liabilities in the form of loans or credit taken. Insurance is needed by families with children to ensure their financial objectives are taken care of in case of contingencies.
Mediclaim is a must for every Individual; it shields your investments during health emergencies. Avoid making the mistake of not taking personal insurance because your company offers one. Remember that your company insurance will cease the moment you retire or bid adios to your organization and if you do not have a personal policy then, my friend, you are asking for trouble.
How much to buy?
As a rule of thumb when you are buying your first Life Insurance Policy it is suggested that you should have an Insurance Cover of at least 8 times your annual income. Medical Insurance should be anything over and above Rs 10 lakhs for an Individual and over Rs 15 Lakhs for family floater policies.
When to buy?
NOW! The earlier you start, the cheaper is the premium, because of your age.
What to buy?
Buy a pure Term cover/ Life Cover for Life Insurance and a MediClaim for health insurance.Separate your investments from insurance. Don’t get tempted by cash back or money return policies or investment linked insurance products which historically are the worst products to invest it in. Have you ever wondered why these insurance products are aggressively advocated by banks or any Insurance agents, it’s thanks to the hefty commissions that they earn and meet their revenue targets. All this goes from your pocket.
Whom to buy it from?
Online, directly from the Insurance company. You eliminate agents/ middlemen cost and your premium would be far cheaper. You save a lot. Stick to big names like Bajaj Allianz, HDFC Life, ICICI Lombard, ICICI Prudential, LIC, etc.
What are the points to remember when you finalise on your insurance policy?
- Tell the whole truth and nothing but the truth to avoid rejection of claims.
- Ensure you have the policy illustrations.
- Read all the fine prints to avoid any misunderstandings.
- The Last Opportunity ‘Free look period’
As consumers, we often end up buying a product that we regret buying because we bought the wrong product, or didn’t get the specifications right, or realize that we were wrongly sold the product. If this is the case of your life insurance, our insurance regulator, IRDA, allows every policyholder 15-days from the receipt of the policy to revisit his or her purchase decision. Up to the end of this period, you are free to re-think and reverse your insurance purchase decision, by returning your policy to the insurance company and asking for your premium to be returned to you.
So don’t shy away from life insurance, get adequate cover to ensure that your loved ones are taken care of financially in case of unforeseen consequence.
‘Ethix’ is open to answering any relevant queries on handling your finances.
Mail him at: mehran@ethix.net.in
or visit his website on www.ethix.net.in
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