Bengaluru: When is it the right time to buy insurance, and what kind of insurance should one go for? Experts believe that young professionals should go for insurance as soon as they get a stable job. With campus placements being the order of the day, many students get jobs almost immediately after finishing their education. Being fresh, these youngsters take some time to settle down in their respective professions.
After confirmation in a job one should think of buying insurance covers because at that stage/age, the premiums are low – ideally, a cover of 15-20 times your annual income is good. When you buy a term plan at an early age, you are able to lock in a low premium for an entire policy term. Whereas, with age the premium amount gets higher and later in life, one has to acquire other necessary assets such as a house which entails hefty EMIs, so it’s better to buy it before.
Why is insurance necessary?
Buying insurance is like investing in oneself as well as creating a financial safety net for family members. Despite being careful, many run into health problems, become victims of accidents, or face life or death situations due to unfortunate circumstances. Insurance comes in very handy in such situations, particularly for someone who is not financially strong. Luckily, there are a variety of insurance plans available in the market, that too at an affordable cost. Moreover, technological advancement has made it easy to compare these plans online and buy them within a matter of minutes.
What insurance plans should one go for?
Listed below are four plans that we consider necessary for any young professional:
1. Health Insurance: There is an alarming rise in the health problems being faced by people in different parts of the country – Stress disorders, obesity-related diseases, diabetes, and several pollution-induced conditions. It is distressing that India has the most number of registered diabetes cases in the world, and as many as 50 million people are already suffering from type-2 diabetes. Whereas, according to a research, over 14.5 lakh people in India are living with cancer and over 7 lakh new cases are being registered every year. Also, an estimated 71 per cent cancer-related deaths occur between the age group of 30 to 69 years.
While on one hand, the health scenario is quite depressing; on the other the cost of medical care has become exorbitant. For instance, cancer treatment in a private hospital can be very costly, and a single session of Chemotherapy can cost you anywhere between Rs 1 lakh to 4 lakhs, depending on the cancer’s stage of progression, and in which hospital it is being treated. Even the cost of hospitalisation in the case of an accident becomes heavy for an average Indian family to bear. In such a situation, health insurance seems to be necessary to take care of any medical emergency.
However, before settling for a health plan, one needs to decide the sum insured (coverage amount), network of hospitals of the insurance company, whether hospitalization is cashless, how much per day is allowed, and whether regular check-ups are allowed to keep track of the health condition and help diagnose diseases at an early stage.
2. Personal Accident Insurance: The personal accident cover in health insurance offers compensation for any kind of accidental injury and permanent or temporary disability. In case of death due to an accident, the dependants receive a substantial lump sum amount prescribed in the policy.
3. Term Insurance: It is a kind of life insurance where the cover is provided for a fixed term. It suits youngsters the best because if bought at an early age, it attracts a very low premium– as low as Rs 700 to Rs 800 per month – for a cover of Rs 1 crore, and the regular premium remains the same over the entire term of the policy. This is very helpful to youngsters because as they keep progressing in their profession, their savings keep increasing, but their insurance outgo remains the same. Term insurance is also important for those who are the only bread earner in the family because in case of their death, their dependents get a huge amount which can take care of kids’ education, home or any other loan payments, etc.
4. Critical Illness plan: When you buy a policy for yourself, make sure you include an adequate critical illness cover as an add-on. You can buy a critical illness add-on with a term plan or a health policy. There are term plans from ICICI Prudential, HDFC, Max Life insurance that have critical illness add-ons that gives cover amount for diseases like cancer, major burns, tumours, coma, paralysis, kidney failure, heart attack and other complex conditions. In case the policyholder is diagnosed with any of the mentioned disease in the policy document, the cover amount would work as a lifesaver. It could save a tremendous amount of money for you and your family.
By:
Jerry Bhutia- Director, Policybazaar.com
