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Insurance – A Basic Necessity Today

As we all know in earlier times, Life, Medical and Car Insurance were considered enough to insure. But in recent times, each and every thing, which you can think, is insurable and required to be insured in this modern era of world. Today, the need of insurance can be summed up as– “Roti, Kapda, Makan and Insurance”.
At present, there are many types of insurance plans available in different segments of General, Health and Life. Moreover, Retirement planning can also be done through insurance plans.

GENERAL INSURANCE PLANS:

Insurance cover can be opted for many different purposes and one can get mental peace by transferring unforeseen risk to the Insurance company. The below stated General Insurance plans are should be subscribed.

  1. Fire and Special Perils Insurance
  2. Machinery and Equipment’s Breakdown Insurance
  3. Public Liability Insurance
  4. Workman Compensation Insurance
  5. Two wheeler, Car, Ambulance and other Vehicle Insurance
  6. Group Health Insurance
  7. Group Accident Insurance

HEALTH INSURANCE PLANS :

Health insurance is a very important need of any leaving human being. A glimpse of health insurance plans is given as under:

  1. Basic Health Insurance Plan : This type of Plan covers only basic expenses of hospitalization, pre & post hospitalization expenses and Ambulance expenses, etc. In this type of plan, the insured have to make co-payment for the Medical Bill. Cost of this type of plan is generally very low.
  2. Medium level Insurance Plan : This type of Plan comes with some more additional features than Basic Plan, i.e. Global Cover, Bariatric Surgery, Daily cash for accompanying child, etc. These types of plans are most popular plans.
  1. High end Insurance Plan : This type of Plans generally includes all type of features available under Health Insurance Plans. i.e. High end diagnostics, OPD treatment, Dental treatment with OPD treatment, Air Ambulance, etc. These types of plans are mostly taken by High net worth Individuals.
  2. Special Feature Plans (Benefit Plans) : This type of plan offers lump sum benefit if some illness happens. Most famous Plans are Critical illness Plan, Cancer Plan, Diabetes Plan, Cardiac Care Plan. At present COVID Insurance is in demand.
  3. Personal Accident Plans : Under this plan one can get insurance against financial loss from all type of accidental injuries. Under this plan one can get benefit for Death, Permanent disability, Partial disability, Income Loss, etc. More over one can get a lump sum amount for Loan, Child education, etc. Hospitalization expenses due to accident are also covered under this plan.

LIFE INSURANCE PLANS :

There are majorly three types of Life Insurance are available in the market, described as under :

  1. Term Insurance Plans : This type of Plans are most popular Life insurance plans at present. In this plan one can get sizable amount of insurance by paying very small amount of premium. In this plan many add-on covers and features can be included and one can get best plan suitable to him. One can get basic death benefit under this plan and if he wants than add-on like personal accident, return of premium, critical illness cover, premium waiver option, maturity benefit on monthly basis, can be added.
  2. Endowment Plans : This plan is best to save money regularly for long term in disciplined manner besides taking Life cover, one gets his money back, mainly via two segments one is Guaranteed Return Insurance Plan and other one is Reversionary Bonus plus Terminal Bonus driven Insurance Plan. In Guaranteed Return Insurance Plan one can get fixed assured return. But in Bonus driven plan return depends on bonus amounts declared by Insurance Company every year. With this plan generally one can get 10X to 20X insurance of yearly premium paid.
  3. Unit Linked Insurance Plan : Through this plan one can get market driven investment insurance plan. In this plan a person pays the premium and gets Units for available amount for investments. He gets benefited by increase in Unit’s price. This plan is best for Tax Free returns from Equity market with insurance facility.

Above is very basic understanding of various type of Insurance. For detail understanding of each plan one should take advice from a good Insurance advisor.

NEED FOR CUSTOMIZED SOLUTIONS :

In present times many Insurance plan are available for almost all types of financial risks. Insurance companies offer different features for same need of insurance. One has to choose the best suitable plan from different offers given by the insurance companies. An Insurance advisor can help you to provide  right option with required features by studying all the insurance plans and suggesting you customized solutions.

HOW TO CUT YOUR COSTS OF INSURANCE?

As we have stated above, an Insurance advisor can help you choose the best insurance plan in terms of features of the plan, along with cutting the costs of insurance by comparing the premium of various insurance plans available in the market. For example, government has made mandatory for every insurance company to give an insurance plan for COVID 19 with same features. If someone wants to take COVID 19 insurance, the advisor will suggest the best option with the least premium amount. Secondly, the unnecessary features can be avoided with the guidance of an able advisor while taking insurance, thereby saving unnecessary costs.

WORK WITH AGENTS/BROKERS WHO CAN OFFER MULTIPLE COMPANY’S INSURANCE PLAN :

A good advisor should have multiple insurance company products in offering to offer customized solutions and the most competitive plan in term of features and rate of premium. When an insurance advisor offers multiple company offerings, he is not representing a particular company but working to address the needs of his client in the best possible manner.

GUARANTEED RETURN UNDER THE INSURANCE PLAN TO BUILD A RETIREMENT INCOME OR CORPUS:

An attractive guaranteed income generating plan available in the market at present, through which one can invest a fixed amount yearly and get tax free income lifelong with return of capital amount. One can get fixed income till the age of 99 years. In other option one can pay premium for 10 years and from 12th year to 36th year get a very handsome amount as tax free income. It is the best plan against the pension plans or any bank fixed deposit of nationalized bank. One gets more than 10X insurance of yearly premium paid absolutely free. It will also give benefit of tax deduction u/s 80C.

One should definitely consider this plan for retirement planning. INSURANCE AS A VEHICLE OF INVESTMENT:

Unit linked insurance plan(ULIP) is a unique setup where one can get insurance as well as can do Tax Free investment in desired segment of investment. These days insurance company offers ULIP at very low expense ratio, so in longer term it is better option to invest your money through ULIP. So, one can get tax free returns at very low expense ratio. One can invest his money in ULIP and get benefit of deduction u/s 80C also. To do investment in equity in discipline manner for long term, ULIP is the best option.

Hence, one should take route of ULIP for growth-based investment in equity.

CONCLUSION

The role of insurance today has evolved to become a basic necessity in our lives. While selecting the insurance coverage, one should go for a holistic approach exploring different insurance offerings across Life, Health & General insurance plans.
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