3 essential insurance coverages – The Economic Times


An insurance policy covers the policyholder against financial loss due to specific unforeseen events. Although there are many types of insurance policies, it is important to know some basic policies that one must have.

Term life insurance

This policy covers the death of the insured. A person who has dependents should have term life insurance. By entering into a term plan at an early age, the person pays a lower premium over the term. Term plans inherently have lower premiums than endowment plans or Ulips. Depending on the age of the claimant, you may be required to go for a health check before the policy is issued. One can buy a term plan through an insurance advisor or online using insurance aggregation platforms.

Health insurance

This coverage allows the reimbursement of various medical expenses. There are a multitude of tailor-made health plans for the elderly, people with certain pre-existing conditions, students, families, and more. One should choose a plan that meets their medical needs. Many times an employer provides health insurance coverage to the employee and his family. In such a scenario, it is important to know the amount of coverage and if there is less, one can purchase supplemental health insurance to fill the void.

Car insurance

It is mandatory for vehicle owners in India to have third party liability coverage for all of their vehicles. Although the premium for liability coverage is very low, it will only cover damages payable to a third party injured in a vehicle accident. To be able to cover other expenses related to bodily injury for the repair of the damaged car, one can opt for an all-risk insurance cover.

Points to note

  • It is important to weigh the benefits, endorsements, premiums, loss ratio, business history before choosing the right insurance policy for you.
  • Insurance plans purchased online generally have a lower premium compared to those purchased offline.

(The content on this page is courtesy of the Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava, and Labdhi Mehta.)

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