There is a huge pull factor in markets about insurance. But a person can fully survive and cover most risks if he/she knows about these 5 insurance policies to buy. The confusion can be less if you know the 5 insurance to buy. Here is the list of Insurance You Should Buy only and nothing else.
Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. One can save premium costs if he is aware of these 5 insurance to buy first. Insurance You Should Buy save money & time to deal with all these.
The basic purpose of purchasing insurance is to be indemnified for the unforeseen loss, by the insurer to the insured.
One of the golden rules while dealing with insurance is that one should never mix insurance with investments as the former is to avoid risk and the latter contains risk in itself.
Hence both insurance and investment should be dealt with differently.
In this article, we’ll discuss 5 insurance to buy that you shouldn’t do without.
5 Types of Insurance You Should Buy Immediately
This may include:
Protecting yourself in the event of disability, protecting family after one’s death from loss of income, ensuring debt repayment after death, covering contingent liabilities, protecting against the death of a key employee or person in your business, protecting your business from business interruption and loss of income, protecting yourself against unforeseeable health expenses, protecting your home against theft, fire, flood, and other hazards, protecting yourself against lawsuits, protecting your car against theft or losses incurred because of accidents and many other events.
LIFE INSURANCE
Life insurance protects people who are financially dependent on you. If your parents, spouse, children, or other loved ones would face financial hardship if you die, life insurance should be high on your list of required insurance policies.
Life insurance provides you with the opportunity to protect yourself and your family from personal risk exposures like repayment of debts after death, providing for a surviving spouse and children, fulfilling other economic goals (such as putting your kids through college), leaving a charitable legacy, paying for funeral expenses, etc.
Which policy should I buy?
The various products available in the market which cover life insurance are as follows: Term Policy, Endowment Policy (also called Traditional Plan), Whole Life Policy Money Back Policy, Unit Linked Insurance Policy.
Term Policy is a pure insurance product all others are mixed with Investments. As the name suggests it covers an individual for a particular term without returning any amount at maturity. This kind of policy covers the insured for a larger sum assurance with the lowest of premiums.
HEALTH INSURANCE
The soaring cost of medical care is reason enough to make health insurance a necessity.
Although the ever-increasing cost of health insurance is a financial burden for just about everyone, the potential cost of not having coverage is much higher.
Which policy should I buy?
The policy is popularly known as the Mediclaim policy. These come as Family Floater or single-person plans.
People about to enter their late 30s should buy a Critical Illness Policy also as it covers 10 major illnesses.
ACCIDENTAL DISABILITY INSURANCE
The prospect of disability is so frightening that some people simply choose to ignore it. While we all hope that “Nothing will happen to me”, relying on hope to protect your future earning power is simply not a good idea.
Besides health insurance, disability is a very critical type of insurance that individuals should consider having. Think about this, the probability of becoming at least temporarily disabled during your working years is higher than the probability of dying during your working years.
The various types of policies are: Basic, Wider, & Comprehensive
The variant to buy depends on individual to individual but still, a comprehensive accidental policy is always advised because as the name suggests it has a broader cover.
HOME INSURANCE
The cost of buying a house is quite expensive in today’s world. Even the cost of renovating a house is quite high. It becomes almost impossible to build a second home completely by ourselves in the event the first one gets damaged due to any unforeseen event like burglary, fire, theft, etc.
Replacing your home is an expensive proposition. Having the right home insurance can make the process less difficult.
Which policy should I buy?
The only things that you would want to include in your coverage are important. Look for one that covers the replacement of the structure and contents in addition to the cost of living somewhere else while your home is repaired.
AUTOMOBILE INSURANCE
We all have auto insurance as it is mandatory under the law in India.
If you are involved in an accident and someone is injured or any property is damaged, you could be subject to a lawsuit that could cost you heavily.
These are two types a) Third Party Liability (mandatory by law) and b) Comprehensive. In Comprehensive, even your vehicle is insured against damage.
Conclusion – 5 Insurance You Should Buy
When considering purchasing coverage, you should review all the potential risks and the financial impact of these risks on your financial health. This will help you determine what options to look for and what questions to ask.
Do not fall prey to options other than these 5 Insurance You Should Buy.
