In simple terms, Insurance is planning for uncertainties. We normally plan for certainties of life and ignore uncertainties and unfortunate events.  Insurance is one of the most important financial topics in today complex world. Failure to have adequate  insurance coverage is like putting oneself for Financial burden. Insurance is nothing but transfer of potential risk to insurance company at a cost. Nothing will make your business, car, house, family, or self more vulnerable or susceptible to financial strain than a lack of adequate insurance. However, paying too much for insurance premium can be a financial strain in itself. Hence insurance should be looked at purely as expenses and premium is paid for risk and not for getting any returns or any maturity benefit. It should benefit you or your family  in case of any  uncertain events.
Hopefully, you now realize that insurance is a necessary part of today world. So let move on. There are four questions you should have in mind when you set out to purchase insurance.
There is also a fifth question that you should continually ask yourself when deciding about your insurance needs.
What really happens if you arena covered, whether its not enough of a particular type of insurance or none at all? Imagine a scenario and play it out in your head. Will it even affect you? Can you recover from it at all? We will go through some basic scenarios together and you can decide for yourself.
Life Insurance: Life Insurance is a contract by which you can protect yourself financially against specific losses by paying a premium for a specific term. Since each one of us, during our lives are faced with numerous risks - failing health, accidents and any eventuality , our instinct drives us to cover ourselves against those risks. Though an insurance cover can't protect you against the emotional losses arising out of these risks, it softens the economic crisis that usually accompanies these losses. It can partially cover your future value and compensate the dependents to take care of their rest of life. It can help them to pay off the housing loan, car loan any other loan and maintain the current standard of living, take care of education and marriage expenses of kids.
Simply put, life brings with it many surprises, both pleasant and unpleasant. By taking a Life Insurance Plan one can ensure that he / she is better prepared to face uncertainties in number of ways and can plan to leave behind a certain guaranteed sum of money at an uncertain time.
Offer high death benefit at low premium but no maturity benefit. Premium return policy or premium guarantee plan policy. There are term plans which returns back the premium paid at the end of the plan without any returns on the premium.
Popular and widely accepted products like Endowment, Whole life, Money Back and Pension plans with/ without guaranteed Maturity benefit fall under the category of Traditional Plans. Periodic payment of certain percentage of sum assured is made at regular intervals as premium and the Sum Assured is payable at Death / maturity. Whole Life plan is a permanent insurance plan with a limited payment option and it provides guaranteed death benefit as the insurance is covered till age 100. Premium is higher than term plan but cheaper than normal endowment plans.
Unit Linked Insurance Plans (ULIP): ULIPs offer a unique combination of security from life insurance and earnings from investments along with various funds options. Like any traditional plan, ULIP also addresses various future financial needs which may come up for an individual, like Child education, Marriage, any financial goals arising in the Medium term, Retirement, etc.
Health Insurance: With medical costs spiraling out of control and the increase in shift to lifestyle diseases, healthcare today is at its all-time high in terms of treatment costs. In the event of an unforeseen illness, you may have no option other than to utilize your hard earned savings, built over your lifetime. Finally, what’s more important than your health and what better way to protect it than with the right Health Insurance Plan.
A Health Insurance plan ensures complete peace of mind and makes sure that you use your hard-earned savings for the real reasons – Be it your child’s higher education or his dream wedding, a well deserved family vacation or just about anything you dreamt of all your life.
For those who have a family, we recommend a family floater instead of a standalone policy since the probability of all family members needing hospitalisation at one go is remote.
Even if your employer offers group medical insurance, get your own cover. A change of job or retirement could leave you without health insurance. Getting a fresh cover after 45 is anyways difficult.