How to Choose an Insurance Policy that is Right for You?
Indians today are waking up to the importance of insurance plans in their financial portfolios. According to a report published by Swiss Re Sigma, insurance penetration in India grew from 3.76% in FY2020 to 4.2% in FY20211. This increase was contributed by both life and non-life sectors.
Though penetration is still low, it is expected to increase in the coming years as the pandemic has pushed people to look for insurance to protect their families.
However, when buying an insurance policy, you need to do a little research. Insurance is a complex subject and with financial protection at stake, you can’t take chances – so it’s essential to choose the right policy.
But how do you choose the right plan?
Things to consider when buying insurance
1. Type of policy that you need:
|Type of policy||Is it needed?||Why?|
|Term life insurance plan||Yes||It covers the risk of premature death and provides your family financial assistance in your absence|
|Indemnity-based health insurance plan (covers the actual cost of hospitalisation)||Yes||Medical emergencies have become increasingly expensive. This plan covers your medical bills and allows you to avail of quality healthcare without worrying about costs|
|Critical illness health plan||Maybe, if you need to enhance your health coverage||It pays a lumpsum benefit upon diagnosis of specified critical illnesses. This benefit can help you handle high medical costs and other financial obligations|
|Motor insurance plan||Yes, if you have a vehicle||It is legally mandatory to have a motor insurance policy for your car or bike|
|Travel insurance plan||Yes, if you are travelling||It covers the costs of contingencies you might face while travelling, especially overseas|
c. Find cost-effective plans
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
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