Here is a call for your attention to something you should have done already. If you haven’t, go right now and do it.And that is Insurance, both for Life and for assets, including good health which is the greatest asset one could have.
‘Insurance’ literally means ‘protection against future loss’.
Life Insurance protects a person or a host of persons financially against loss of life of their bread-winner. If your child, spouse, or a parent depends on you and your income, you need to insure your life. You buy Life Insurance if you want to leave a legacy for those you love.
Today, this can be done in so many ways. There are different types of policies (or plans) available to satisfy your needs. But there is one type of Life Insurance every bread-winner must necessarily have, and that is a Pure Term Policy.
Pure Term Policy
Pure Term Policy is the simplest form of life insurance cover. It will give the nominee or nominees a big sum of money but only in case of the death of the person insured. This can be taken to cover the person’s life for a certain amount for a certain number of years.
For example, if a 30-year-old person covers his life for the next 30 years, and wants a death benefit of Rs. 50 lakhs for his nominees, he has to pay a yearly premium in the likes of rupees eight thousand only! (But he has to pay the premium every year without break for the committed number of years and if he passes away within that period, the Sum Assured will be paid to his nominee. If he forgets or neglects to pay the premium for even one year, the policy expires).
This is the simplest and cheapest form of life coverage. Even people who start their career at very low incomes can afford these.
Then there are insurance policies which can be taken to get maturity benefits at the time of one’s marriage, or when children are born, or when buying a house, for children’s education, and even for a big sum at retirement. These are all called endowment policies.
There are policies which are linked to investments. These have been devised to satisfy persons who want to take risks with their premium payments, while they remain insured against the risk of death. A part of the premium paid is utilized for guaranteeing death benefits while the rest will be invested in various Government funds or equity markets, depending upon the risk preference of the policy holder. Depending upon the fluctuations in the market, the benefits will vary, while the life is always covered for an assured sum during the policy term.
Short Term Policy
Certain plans are offered for short-term premium payments, as short as seven years, in return for a payment every year for the following seven years, or a lump sum amount in the event of death earlier.
For example, one pays a lakh of rupees as yearly premium for seven years and gets paid Rs.1.30 lakhs every year for the next seven years and also a lump sum of 5.5 lakhs at the end of the fifteenth year. Take it for 12 years, get 1.75 lakhs from the 13th year to 25th year. The lump sum also is available. In case of death earlier, the guaranteed pay to the nominee will be Rs. Eleven lakhs. All these payments are guaranteed, no matter what happens in the market.
Most of the policies can be attached with coverage for additional risks. These are known as riders, which cover the risk of accidental loss of life, or accidental dismemberment or death of the payer in case of juveniles. The additional premium for these riders is usually very low.
Retirement or pension plans are usually offered by the Government. Provident Funds and People Provident Funds are some, which help a person to retire happily.
In today’s scenario, insurance is essential as cost of a life is huge and financial security is essential, what with the system of nuclear family and increased cost of living.
Why Indemnity of Assets other than Life?
We shall now discuss the indemnity of assets other than life, which comes under the category defined as ‘General Insurance’ by IRDA.
A friend of mine travelled to the USA to be with his daughter and her newborn child. A couple of months into his stay, he had a heart attack, requiring immediate bypass surgery. He didn’t have any travel insurance, as he had not anticipated this situation. His daughter had to borrow money from friends to pay up for the surgery and hospital stay. When he came back and settled the money in rupees, to his dismay he found that all the money he had received from his provident fund on retirement was washed away.
Another friend got his passport robbed along with all his travelers’ cheques in Rome, Italy. He was kept in a cell until a duplicate was supplied by the Indian Authority and local friends helped him with some money to get back home. Now only the memory of all that struggle remains in his mind, not the pleasure and peace he obtained from the holy place.
These are some examples of not getting medical insurance and travel insurance, especially when you go out of the country.
Health Insurance is very important, as the cost of medical investigation and treatment has skyrocketed in recent times. Cancer is so expensive to treat, that most insurance companies pay up the entire indemnity up front, as soon as the diagnosis is made.
Accident Policies work for both Life and General Insurances and compensation is offered for death or for loss of limbs, and or other organs. Many Insurers offer even compensation for loss of pay at the company during hospitalization.
Other Insurances for fire, theft and damages can also be taken for immovable assets and properties, depending on their value. The case with General Insurance is that they only compensate you to the extent of the loss and will not allow one to make a profit out of the loss.
Usually, corporate and business enterprises would take the cover for the lives and also the hospital expenses of their employees and their kin. The cost of such group insurance is far less than all the individual insurance put together. This helps them to lure good employees. But nowadays, corporates fix salaries on contract basis without any insurance cover. But it serves you well to look for employers who offer to cover insurance.
Why You should Choose Tata Insurance
An Insurer has to be absolutely trustworthy as you depend on them to compensate you as promised even if you aren’t around. They and their agents should be ethical. And ethics, in the words of JRD Tata, the founder of most Tata Enterprises “includes gratitude, loyalty and affection to the customer”.
JRD used to say, “Success is worthwhile only when it is achieved by fair and honest means” and, “The best Quality Inspector is the Conscience” and “Corporation also has Conscience”.
What a man, to man a group like that! Both the insurer and the insured are at peace with themselves in this Company. That is why I work for the Tata Insurance companies. They do both types of insurances. And it might surprise you to know that Tata’s Claim Settlement Ratio is 96%.
Contact for buying Tata insurance Policy in Chennai: The author R.B.Krishnan can be reached through Email ID firstname.lastname@example.org or mobile 9884031616. Do contact him for consultation and buying insurance policies in Chennai.
This is a guest post by R.B.Krishnan. All the opinions expressed in this post is that of the author only. This post is not a recommendation/endorsement, hence be sure to do thorough research before you decide.