An all comprehensive checklist for your entire insurance needs —both life and general. This is the master list that you will ever need!
Some of the most common insurance policies, such as life insurance policy, health insurance policy, motor insurance policy and travel insurance policy, need to be reviewed periodically as any changes in the circumstances may alter your insurance needs this year. Purchasing a new car, getting married or deciding to start a family, planning a holiday in the current year are few of the events which would require you to review your insurance policies. To ensure that you have adequate insurance here is a ready checklist for your various insurance policies:
Life Insurance
Purchasing good life insurance is of paramount importance to protect those who are dependent on you, in case of an untimely death. Getting married, starting a family or untimely demise of an earning member are some of the life-changing events that require you to review your life insurance needs.
Here is a quick checklist of things you need to consider before purchasing your life insurance policy
- Purpose of buying life insurance: Every individual is different and hence has different insurance needs. Many factors, such as current financial liabilities, number of dependents, and number of earning members in the family, need to be considered before you choose an insurance plan. If you are the only earning member of your family and have one or more dependents, it is always advisable to go for a pure term plan instead of investment-cum-insurance plans to have a high sum assured at the lowest possible premium.
- Assess the insurance cover needed: The most crucial aspect of buying life insurance is to assess the insurance cover that your family would need in your absence. Being underinsured can cause serious financial stress to your loved ones in trying times. You should have sufficient cover so that your family can lead a comfortable and dignified life. It is suggested that the minimum insurance cover should 10 times your annual income after paying off all the liabilities.
- Understanding the policy: Before buying an insurance plan, it is essential to be clear about the kind of policy you want. If it is a pure term plan or investment-cum-insurance plan, consider the benefits offered, the tenure of the policy, payout in case of death or survival, the premium amount, the premium paying term, and the surrender charge, if any.
- Understanding the riders: A life insurance policy comes with many riders. You may be tempted by your insurance company or agents to opt for one or more riders. However, you should include only those riders which you fully understand and find useful. Simply adding riders for the sake of it to your policy would only result in increasing the insurance premium.
- Do not hide information: Concealing any important information that is crucial for the issuance of your life insurance policy may result in rejection of claim or cancellation of the policy. Thus, you must give all the required information to the insurance company at the time of buying the policy.
- Exclusions in the policy: All insurance policies come with a list of exclusions. These exclusions are clauses for which the insurer will not be liable to pay the claim. Thus, you must be aware of all such exclusions in your policy beforehand. All the policy exclusions are mentioned in the policy document, and if you have any doubt, you should clear it with your insurance company.
- Claim settlement history of the insurer: Having an insurance policy from a good and reputed company is very important. It is very important that you do a thorough check on the market reputation and financial strength of a company before buying any policy. You should go for a company which has the highest claim-settlement ratio.
Health Insurance
In today’s day and age, it is extremely crucial to have a good health insurance policy. The health insurance industry is flooded with insurance plans and choosing the perfect plan sure is a herculean task. Rising medical costs, increase in the number of diseases and accidents can severely hamper your finances, if you do not have a good medical insurance policy to take care of your financial needs in times of such emergencies. Therefore, not having an insurance policy or selecting a policy in an ad-hoc manner, just for the sake of it, can cost you a fortune or even force you to stop your treatment mid-way due to lack of funds. Thus, having the right policy for you and your family is very important.
There are many factors you need to consider before choosing the right plan, but most importantly you need to know your healthcare needs and financial strength.
Here is a quick checklist for your health insurance needs
- Sum insured: After analysing your health care needs and financial situations, look at the sum insured in your medical policy because of any expenses in the medical treatment over and above that need to be borne by you. Thus, you should have a higher sum assured from the very beginning to avoid paying from your pocket in case of any medical emergency later. Another reason to have a higher sum insured is that it will also be difficult to increase the sum insured as your age increases or after a claim.
- Individual plans or floater plans: The decision to buy an individual plan or a floater policy would largely depend on the size of the household. If there are too many people in a family buying an individual plan for everyone will be very expensive, and it is advisable to opt for a family-floater plan as there is the flexibility of utilising the coverage among the family as a group. In case of a family floater plan, the sum insured should be sufficient, just in case more than one person needs medical care in the same year. A husband and wife can, however, opt for individual plans.
- Focus on the bigger expenses: One should focus on the various limits of larger expenses involved in the medical treatment such as room rent, ICU charges, and doctor’s fees. In case of emergencies, it is these bigger expenses which are more important, and you should focus on such bigger expenses in advance. Smaller charges such as ambulance charge and daily cash can be ignored.
- List of inclusions and exclusions: Before buying any health plan it is important to check the ailments and illness that are included and excluded from your health insurance policy to avoid any confusion later.
- The network of hospitals of the insurance company: The network of hospitals of your insurance company should be reputed, medically equipped, have sufficient staff and must be in your close vicinity.
- The claim-settlement process: One of the most important aspects in case of health insurance is the claim-settlement process. You should check if your insurance company has in-house claims-settlement service or uses TPA for servicing its policies. Insurance companies with their in-house service units are faster when it comes to claim-settlement and also offer a cashless settlement of claims.
- Market reputation: With numerous health insurance companies in the market, choosing the right service provider can be a task. Thus, it is important to look at the market reputation, previous claim settlement history and ease of the claim-settlement record before choosing the plan.
Motor Insurance
Motor insurance comes in varied packages, and before purchasing a motor insurance policy, you need to decide on the extent of insurance you will need to safeguard you from financial damage in case of an accident. A car insurance policy has three basic purposes:
- A third-party coverage
- A vehicle-damage coverage
- A personal-accident coverage
As per the Indian Motor Act, a third-party coverage is mandatory for all vehicle owners. They are required to purchase a third-party insurance cover and optional to buy the other two. However, it is advisable to buy a comprehensive cover to cover you financially in case of an accident or theft of a vehicle.
Here is a quick checklist for your motor insurance
- Insurer declared value (IDV): IDV is the total maximum amount that can be claimed in case of theft or total loss of the vehicle. IDV is calculated by subtracting the depreciation of the previous year from the IDV of the previous year. Many times you may be lured to buy an insurance policy with a lower IDV to lower your insurance premium. However, lower IDV also lowers the car value, which means that at the time of a claim you will get lower insurance than the actual value. Thus, you should look for a policy which offers the lowest premium for the highest IDV.
- The claim-settlement history: You should always buy insurance after looking at the claim-settlement history of the insurance company as the claim-settlement process should not be cumbersome and time-consuming.
- Cashless claim-settlement process: This is one of the most important things to consider while buying motor insurance. You should also look for insurance companies who have authorised garages in your area so that in case of an accident you just have to inform your insurance company, and they will guide you to the authorised garage and pay for the damages directly.
- Compare the policy terms and premiums: With so many general insurance companies competing with each other in the market, you must purchase a policy after doing the online comparison of the policies offered by the various companies, to get the best deal. You should look for all the features and benefits of your plan and not just go for any policy just because it has the lowest premium. While buying a motor insurance policy, ensure that all the aspects related to an accident are covered by your policy.
Travel Insurance
Travelling, for business or leisure, solo or with family, is always one of the most enriching experiences in everyone’s life. But like all other aspects of life, travelling too involves risks, and one needs to buy travel insurance to avoid facing problems in case of any untoward incident happening during your travel.
Travel insurance policies are specially designed to cover expenses arising due to unforeseen circumstances and incidents during your travel. Such policies ideally cover your expenses in case of trip cancellation, loss or theft of luggage, medical emergencies, flight cancellations or delays, and injuries during travel.
There are many travel insurance policies available in the market, and it is important to choose the policy that provides you with an adequate cover. A policy that does not meet your requirements can cost you a fortune and even leave you helpless.
Here is a quick checklist to help you select travel insurance for your next trip:
- Family holiday: If you are planning to take a holiday with your family, it is important you buy a family insurance plan to cover everyone on the trip. Buying individual plans can be expensive, and it is better to go for comprehensive family insurance with sufficient cover.
- Duration of your trip: You should take a policy that covers you for your entire trip. However, the longer the trip duration, the higher is the premium for your policy.
- The frequency of travel: If you have a single trip planned then you should take a policy for that specific trip only. But if you are a frequent traveller and plan to travel often buying an annual multi-policy plan may work out to be a cheaper option.
- Destination of your travel: If you are travelling abroad, take a policy that will provide you coverage in the country where you are travelling and choose the sum assured as per the medical costs of that country as for some countries the costs are higher than the others. Also look at the social, geographical and political aspect of the country you are travelling and buy protection to meet the country-specific requirements. For example, if you are travelling to a country frequently affected by earthquakes then include that in your policy.
- Cancellation of a trip: If due to any unforeseen circumstances you have to cancel your travel plan, it is advisable to check for policies where the non-refundable costs of travel and conveyance will be borne by the insurance company.
- Medical emergencies: Injuries and illnesses can happen anywhere, and thus you should opt for a plan that would cover medical cost of treatment and provide hospital allowance if such a situation arises.
- Previous conditions: All pre-existing medical conditions should be disclosed beforehand otherwise the insurance company can reject your claim on the grounds of concealment of facts.
- Loss of baggage or personal belongings: Choose a policy that will compensate you for lost or stolen, personal belongings including passport and other important travel documents.
- Missed or delayed flights: One of the major problems while travelling abroad is while connecting flights that can lead to delays and miss your flights. Take an insurance plan to protect you from financial losses due to such flight schedules.
- Wounds during sports: Accidents due to sporting activities are not covered under most plans, and if your trip involves such events, it is always better to customise your travel insurance to cover accidents from such sports.
- Telephonic assistance: Buy a travel insurance plan that has a 24-hour helpline, to be connected to your insurance company at all times in case of an emergency.