Insurance

Life Insurance
Health Insurance

Life Insurance is a financial cover for a contingency linked with human life, like death, disability, accident, retirement etc. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is loss of income to the household.

Though human life cannot be valued, a monetary sum could be determined based on the loss of income in future years. Hence, in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by way of a ‘benefit’. Life Insurance products provide a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident.

Why you should buy Life Insurance:
All of us face the following risks:

Dying too soon
Living too long

Life, as we know it, can throw a surprise at any moment. Surprises are welcome as long as they are pleasant. Rude surprises completely take us by the hook!

A heath emergency, an accident, or sudden death – these are some eventualities that you and your family must always be prepared for. That is where the importance of life insurance lies.

In other words, look at life insurance as your replacement as far as income is concerned. Thus, helping your family and you get over any kind of financial problems, if you are not able to take care of them. As simple as that!

The significance of having a life insurance is to avail the "peace of mind" that it brings along. However, having an adequate amount of life insurance effectively sets your mind free of some important questions like:

• What will happen to my family financially after I die?

• How will my wife and kids take care of their expenses after I am no more?

• How will I provide for my family in case I lose my job after an accident?

• How do I ensure that I am able to fund my child’s higher education?

• How do I ensure an income after my retirement?

Life Insurance is needed :

To ensure that your immediate family has some financial support in the event of your demise
To finance your children’s education and other needs
To have a savings plan for the future so that you have a constant source of income after retirement
To ensure that you have extra income when your earnings are reduced due to serious illness or accident
To provide for other financial contingencies and life style requirements

How much Life Insurance is needed:
The amount of Life Insurance coverage you need will depend on many factors such as:

How many dependants you have
What kind of lifestyle you want to provide for your family
How much you need for your children’s education
What your investment needs are
What your affordability is

The term ‘Health Insurance’ relates to a type of insurance that essentially covers your medical expenses. A health insurance policy like other policies is a contract between an insurer and an individual / group in which the insurer agrees to provide specified health insurance cover at a particular “premium” subject to terms and conditions specified in the policy.

Health insurance in India is not a new concept, but the shocking thing is that most Indians still do not understand the importance of having a health insurance.

People should understand that buying a health insurance is more important than life insurance because the chances of you or your parents needing medical care multiple times during your earning career are more realistic.

Everyone is aware of the rising cost of healthcare and in the last few years the cost of hospitalisation and medicines have gone through the roof making it hard to afford quality treatment on time.

Quality treatment for critical diseases that include cancer or heart diseases can easily cost around Rs 5 lakh to Rs 50 lakh. This makes it important for all to buy health insurance or mediclaim.

Why you should buy Health Insurance:

1. Expensive medical cost
This is the topmost reason why people should opt for health insurance for your parents and family, especially NRIs who have parents living in India.

Medical costs are rising on a regular basis making it really hard to manage medical care expenses such as doctors visiting fees, hospitalisation charges, expensive medicines, diagnostic tests, etc.

It is true that peoples thinking has also changed; they are moving towards private hospitals to get quality treatment. Buying a health or medical insurance policy will take care of your expensive health care bills within the permissible limitations of the policy.

2. Quality of treatment
The second most important reason to buy effective health insurance is to provide quality treatment.

An effective health insurance plan will help your parents and you to focus more on treatment rather than the cost involved in it instead of having the cost of treatment haunt you forever.

Normally a health emergency requires complete rest and relaxation with great care. Worrying about healthcare bills can deteriorate your health further. With an effective health insurance that will take care of your bills, you will be able to focus on getting quality treatment for yourself or parents.

3. Tax benefits
This could not be an important reason to buy a health insurance policy for your parents but definitely a benefit for salaried taxpayers.

Under section 80D of the Income Tax Act, 1961, you can avail tax benefits.

In the Union Budget 2018, tax saving benefit for senior citizens has been increased from Rs 30,000 to a maximum of Rs 50,000.

In short, with an effective health insurance policy, you can have the best of health treatment without worrying about expenses.