Friday, March 14, 2014

Insurance Facts - Four Insurance which one should always have

Insurance Facts - Four Insurance which one should always have

1.   Life insurance

If your parents, spouse, children or other loved ones were to face financial hardship if you are no more, life insurance should be high on your list of required insurance policies. Your life insurance requirement translates to how much income your family would need if you died. It's determined by what the ongoing financial needs are or soon may be.

How much do you need?

Your life insurance cover should be equal to 12-15 times your annual expenses or 8-10 times your annual income. If you have a debt, such as a home loan, that should be included too when calculating your cover.

2.   Auto insurance

Automobile insurance is something you shouldn't miss. If you are involved in an accident, and someone is injured or their property is damaged, you could be subject to a lawsuit that could possibly cost you everything you own. Accidents happen quickly and the results are often tragic.
The own-damage cover insures your vehicles against theft or damage and passenger cover insures the lives of the passengers of the car. Insurers don't pay the cost for replacing certain parts of your vehicle but only the depreciated value.

3.   Health insurance

The soaring cost of medical care is reason enough to make health insurance a necessity. Even a simple visit to the family doctor can result in a hefty bill. Serious injuries, resulting in a hospital stay, can generate a bill that tops the price of a one-week stay at a luxury resort.

How much do you need?

Going by the average cost of major surgeries a sum insured of at least Rs6-7 lakh is important. However, if your policy has a lower sum insured, you can consider top-up plans.

4.   Home loan insurance

A home is a place where dreams are built, memories are treasured and relationships are reinforced. Buying and owning a dream home is an aspiration all of us have and it is one of the most important financial decisions you will need to make. Most Indians who decide to buy a home opt for a home loan from one of the lenders. A home loan is one of the longest debts in your life, which requires a long term commitment. You owe money to the lender and this increases your risk profile. A home loan insurance plan mitigates this risk. If something happens to the main borrower and the the family can't afford to pay the EMIs, they can be evicted from the house.



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