When it comes to buying an insurance policy, most of us stop at buying life insurance and then at best, a health insurance policy. That is also partly because not everything you need would be aggressively sold to you or is advertised. A major reason why some products may not be sold proactively is that these may not be working for the distributor. She may not be finding it economically viable or lucrative to canvas for such products. Sometimes you may have to go to the proverbial well, instead of the well coming to you when you are thirsty. Especially, when it comes to financial risk management, it is important not to depend on sales calls alone.

In today’s part-1 story, we talk about two such important covers that you must have, to protect you and your family from financial trouble.

Critical Illness Insurance

A critical illness cover will provide your family with a lump-sum amount of money if you get diagnosed with a serious illness listed in the policy document. With this amount, your family can fund all the additional needs you will have as a result of the disease. Further, this amount will also function as a replacement for the income you might have lost - because of the diagnosis and treatment of the disease.

Why should you buy this policy?

The costs incurred by your family after you get a serious disease such as stroke, heart attack, paralysis or kidney disease, etc., can often go beyond just the treatment costs. Your health insurance will only cover the costs related to hospitalization, and all other expenses for stuff like travel, physical therapy, personal help (nurse) at home, etc. would need to be covered from your savings.

Further, conditions like a stroke or heart attack might demand that you move from your current job, to a less demanding, simpler role - and that means taking a pay cut or sometimes, even a complete loss of pay. Speaking purely in monetary terms, getting a disease could actually cost your family even more than your death.

If you have not built an emergency health fund, you’ll have a very hard time paying these bills out of your pocket. Critical illness insurance can provide financial protection at such a time. It will pay you in situations where a standard health insurance policy may fall short, as it is specifically designed for this.

How much does it cost to get a Critical Illness cover?

You can buy this cover as a separate policy or as an add-on to your base term or health insurance plan.

Comprehensive Critical illness covers: Comprehensive policies that offer an extensive cover for a majority of serious illnesses could get considerably expensive. Further, the premiums are also increased every year, meaning in the long-term they can get pretty unaffordable.

Riders: Riders on the other hand, can be affordable options with premiums staying constant for a certain period of time. However, riders might have certain feature limitations and exclusions which you should thoroughly consider before deciding on buying it.

Home Insurance

You put all your life’s earnings and run around to choose the right locality, right space, and when you find a perfect place; you painstakingly furnish each room sacrificing weekends after weekends to build a perfect home. Don’t you think you should put the same amount of effort into selecting an insurance plan to protect it too?

A sudden fire breakout, natural calamity, or burglary could destroy your dream house within seconds, and this Home Insurance plan is a small price to pay for immeasurable peace of mind. With natural calamities like floods claiming lives and property, home insurance has got some attention from discerning buyers. Yet, it is not yet among the forefront policies that we buy.

Home insurance can help you protect yourself from the financial impact that structural damage to the house or its contents can cause. You can buy this policy as an owner or even as a tenant.

Why should you buy this policy?

What you should remember though is not every home insurance policy covers all types of risks. You must compare all the comprehensive home insurance policies before you zero in on one of them.

The premiums of a home insurance policy are quite low and affordable. For instance, a content-only home insurance plan could cost around half percent (0.54%) of the total value of your content. That is, if you take a plan for say - Rs 20 lakh, you might pay a yearly premium close to Rs 10,800.