You can protect your family too

Written by Lisa Pallavi Barbora

Lisa Pallavi Barbora is a Senior Consultant for Content at WFAN. Lisa is also a founder of MoneyPuzzle.in In her earlier avatar, she was a National Writer and Consultant for HT Mint - a premier business journal in India.

August 30, 2021

Photo by Kindel Media from Pexels

When you hear about protection, you should think of the term insurance. Insurance helps you cover any contingency expenses or risks which can otherwise deplete or savings pile significantly.

The mistake many make is in thinking of insurance as an investment rather than a protection from heavy expenses arising out of potential risks like untimely death, medical emergencies, theft, accidents and so on.

Moreover, it’s life insurance which dominates our mind and wallet space with its hefty premiums. However, insurance is not just about protecting your family by getting the right life cover, you can also protect your family with the right type of medical insurance, home insurance, travel and car insurance.

Covering risks arising from all these aspects not only safeguards your family’s interests but also help you protect that long term saving pool by keeping it untouched.

Here are some useful insurance covers that you should consider.

Term Life Insurance Policy

A life insurance policy should have one single objective, to protect the financial well-being of the family in case of the primary earning member’s untimely demise. It is the life of this member of the family which needs to be insured. The most effective insurance policy, ie the one that has the maximum pay-out on death for the least cost is a term life insurance policy. All other life insurance policies are masquerading as long term investments, but offer very poor returns.

You can protect your family by ensuring that the primary earner has an adequate life cover through a term life policy rather than burning your savings by getting an expensive endowment policy or money back policy which will neither give you enough investment return and nor will it give you enough life cover.

Health insurance

This is a must have at all times. Most salaried individuals are covered for a health insurance plan through their place of work. Regardless of your office provided cover, you should look into a personal health cover too. A health emergency often comes unannounced and suddenly if you are in-between jobs or if your work provided health cover is inadequate, you may end up dipping in to your savings for a heavy chunk of the related medical expenses.

When you are considering a personal health insurance policy, go for one that has the provision of providing a family floater option. In this kind of a plan, there is a floating cover which can be used across four family members, two adults and two children. You don’t need to take individual health covers for each family member.

Travel Insurance

This is a must if you are travelling overseas, but even for travel within India it can be very useful. This type of insurance covers various risks right from expenses towards lost travel documents like passport, medical expenses in overseas destinations, lost baggage related expenses, flight delays and so on. While one does not envisage things going wrong while on vacation or travelling abroad, such eventualities do happen and do not announce their arrival. This is a risk of travelling. Hence, it’s best to be prepared so that you and your family do not suffer any additional financial pain while travelling out.

Home insurance

We all value our home and the house we live in. It’s not often that we think about damage to house property and belongings in it. However, it’s not unheard of either. Fires, natural disasters, thefts and structural damage are possibilities at any point in time. Home insurance can help protect you from financial burden of replacing your belongings or home repairs in case of excessive structural damage. You can even insure your gold jewellery against theft as part of your home insurance.

Car insurance

A comprehensive car insurance cover can help you with financial charges around damage to your vehicle in case of an accident, natural calamity and even third party actions. You can cover damages related to theft too. A reimbursement of these costs can save you a lot of financial headache.

General insurance policies like health, home, travel and car insurance come at a very low cost of a few hundred rupees a month. At the same time, by ensuring you have this protection in your portfolio, you can protect your savings and investments from a big blow in case of an unforeseen eventuality. By protecting your savings with the help of this small cost towards the appropriate insurance, you are protecting the financial future and well-being of your family.

Insurance is the protection you need to ensure unhindered compounding of returns from your investments. Both these aspects, insurance cover(s) and the investment returns ultimately can protect you and your family from any excessive financial burden.

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