Why Getting Insured Is Important and Which Cover Is Essential?

In the current fast-paced and uncertain world, financial security is the top necessity. Health insurance gives you protection against the exorbitant expenses of medical treatment, and life insurance gives you protection against your family's aspirations and standard of living even in your absence. Why then do you need to purchase insurance, and which one do you need to purchase first? Through this blog, you will understand why you need to purchase life and health insurance and how you need to select the proper cover to protect yourself and your near and dear ones from the untimely incidents of life.

What is the Purpose of Buying a Life Insurance Plan?

Insurance cannot restore good health. Insurance cannot bring a dead (wo)man back to life. But insurance may save a sick (wo)man from dying. Insurance can replace income. Insurance can ensure that the dreams of those living are fulfilled. In a nutshell, insurance covers the financial risk.

If the insured dies, their nominee/family receives a fixed “Sum Assured” that helps the family financially sustain for years to come. This amount can also help the children pursue education and become independent in life.

Private healthcare costs are already exorbitant and growing by leaps and bounds due to spiralling inflation which is more than average in the case of healthcare. Whereas even minor hospitalisation bills can badly hurt a common (wo)man’s pocket, critical illnesses are a double whammy.

On one hand, medical treatment costs can run into lakhs of rupees and on the other, income may cease to exist due to inability to work. Health insurance is the only known, financially viable solution that can offset the financial risks by bearing costs of hospitalisation as well as allied services.

Additional benefits even give away lump-sum amounts that can replace the lost income or be used to cover incidental costs (such as additional nursing at home, etc.) which may not be covered in a standard Mediclaim plan.

Life Vs Health Insurance: Which One First?

Both are definitely and equally important and there is no way to assign more weightage to either of the two. However, many a time, for salaried individuals, it may not be pragmatic to sign up for two important policies in one go. Prioritizing one over the other becomes imperative.

Common sense tells you that buying health insurance first is important because if health is taken care of, the probability of death due to illness will be significantly reduced. Go for a health insurance policy first. But do not procrastinate on life insurance for too long.

Types of Essential Life & Health Covers

Listed below are some of the life and health plans that you must stay informed about:

• Mediclaim Insurance: Mediclaim can be considered as a health insurance policy that covers expenses incurred for treating illnesses or ailments through hospitalization. The policy offers a financial cover of a specific amount (depending on the plan opted for) called “Sum Insured” which is the maximum amount that can be expended for treatment. There may be sub-limits under various heads such as room rent, nursing charges, ambulance etc.
  Mediclaim policies offer the option of availing cashless services at its networked hospitals wherein you can apply for cashless authorization for treatment. In case you opt for treatment at a non-networked hospital, you can pay and claim for reimbursement at a later date.
• Terminal Illness: The applicable Sum Insured is paid as a lump sum to overcome the loss of income and to meet any incidental expenses. Claiming this benefit does not require proof of the expense and is paid irrespective of the actual expense.
  This comprehensive plan covers heart and cancer-related ailments and a lumpsum amount will be paid on the first diagnosis or surgery. The lump-sum pay-out is made as a % of the total sum insured and depends on the severity of the illness.
• Term Life Insurance: The name “Term Life Insurance” originally referred to a pure life protection plan for a definite period in the person’s life where a person would have gainful employment. The insurance was meant to replace the income in case of loss of life during the “term”. However, with evolving markets and increasing lifespans, people are living longer and working longer. This implied the necessity for enhanced life protection beyond 60.
  New age insurers have begun offering whole life policies that can extend coverage until the age of even 99! The iSelect Smart360 Term Plan from Canara HSBC Life Insurance is a 360-degree plan giving an option to cover the spouse, opt for return of premiums at the end of the term or even increase Sum Assured as per life stages.
• Accidental Disability Cover: In case of disability or death due to an accident, the Sum Assured is paid immediately. For total permanent disability, the life cover would continue but the future premiums would be paid by the company.

Other Life Insurance Covers You Should Use

Do you think life insurance ends with a term plan? Think again. There are several other covers that can help you build wealth, safeguard against health emergencies, and ensure a stable post-retirement life. Here’s what else you should explore.

• Savings Plan: Your investment portfolio should comprise of a solid, dependable and sustainable savings plan that you can fall back on even if everything else does not go as per plan. Whilst there may be many savings plans in the market, look for an insurer that is backed by credible institutions. In the Guaranteed Savings Plan of Canara HSBC Life Insurance, you can pay premiums for a fixed term and get guaranteed income until maturity.
• Critical Illness Insurance: A critical illness policy gives you financial support when you are told you have a serious illness like cancer, a heart attack, or a stroke. These types of illnesses have a high treatment cost and also lead to you losing income while recovering. A critical illness policy pays a lump sum at diagnosis, which can be used to pay for treatment, repayment of a loan, or keeping your family's standard of living during tough times. Canara HSBC Life Insurance offers critical illness plans that cover a number of serious illnesses. This safeguards you and your family economically if one of these serious health conditions suddenly arises.
• Unit Linked Insurance Plans (ULIPs): Ideal plans that club insurance + investment and give you the best of both worlds. You are free to choose the allocation between equity and debt based on your risk profile and/or the market movements.
• Pension Plans: Money received, post-retirement, from a fixed corpus placed with an insurer is called an annuity. Pension4Life plan of Canara HSBC Life Insurance allows you to opt for a single-life annuity that pays you till the end of your life or a joint-life wherein your spouse continues to receive income after your demise.

Final Thoughts

Life is unpredictable, and although we cannot know what is going to happen next, we can prepare ourselves for it. Life and health insurance are both necessary to safeguard your finances and your family's future when something unexpected occurs. From covering medical expenses to providing financial assistance when you are no longer alive, the proper insurance policies enable you to live with peace of mind.

Canara HSBC Life Insurance offers different life and health insurance policies that are made to suit your requirements and expectations. Take the intelligent decision today to secure your future with a trusted insurance partner by your side.