5 basic insurance policies that everyone should have

When it comes to your valuable possessions, it is always advisable to have them financially protected. Uncertainties like accidents, untimely death, or property loss can occur at any time, and having an insurance acts as a safety net to fall back on. Though having an insurance coverage is good for you, all insurance policies need you to shell out some money. And if you have purchased too many insurance policies that you don’t actually need, you may end up spending a lot of money unnecessarily.

It is always good  to understand your needs so that you can choose your insurance policies wisely. However,  there are five basic insurance covers that everyone should have so that your and your near ones are financially secured against uncertainties in life.

Life Insurance

People generally tend to plan out their lives till they grow old and wrinkled. Nobody likes to think of the possibilities of an untimely death. But life is not only precious but also uncertain. In case you lose your life unexpectedly, your loved ones are bound to face many hardships. For this reason, it is always advisable to have your life insured, regardless of your age.

A term life insurance policy will give financial protection to all those who are dependent on you, your parents, spouse and children when you are no longer a part of this world, especially if you are the primary breadwinner.

Traditional life insurance plans also serve as a tool of  investment. You can invest in a life insurance plan and earn fixed returns after a fixed period of time.  When opting for a life insurance policy, just take your average yearly income and the number of years you plan to stay employed into account and purchase a life insurance policy that will replace that income in case you lose your life unexpectedly.   

Health Insurance

When it comes to your life, an untimely death is not the only thing you have to worry about. You may also have to deal with many other health issues, which may or may not be serious. Whatever the case, the cost of treating health issues is quite high and may end up draining you financially.

If you have a health insurance, it will financially protect you and your loved ones in case of medical emergencies. And since having your health insured can be a financial burden on you, you can invest in one you can afford. But remember, the cost of not having a health insurance can be much higher than having one.

Car Insurance

Having a car insurance is mandatory in almost all states of the country, so if you have a car, you have a car insurance policy. Such a type of insurance policy can financially protect your vehicle in the event of an accident or theft.

Since there is no rule concerning the minimum value of a car insurance you need to purchase, you need to consider the value and age of your car when getting an optimum car insurance policy. Consider getting one that covers the cost of theft of your car, damages to your car, damage to others’ properties because of your car, and the cost of medical treatment of the driver and passengers in case of injury.

Two Wheeler Insurance

Similar to car insurance policies, two wheeler insurance policies are also mandatory. You can invest in a basic one that covers property damage, physical injuries, and death, or you can invest in a comprehensive one that gives you financial protection in case of theft.

An insurance policy called own damage policy also gives you financial coverage if your two wheeler gets damaged due to natural calamities, riots, terrorist activity, and damage during its transportation by air, road, rail, or water.

Travel Insurance

Travelling from one place to another is always a risky business. Investing in a travel insurance will cover the costs and losses you might incur unexpectedly while travelling.

Some travel insurance policies cover the cost of trip cancellations and interruptions, loss or damage of your baggage and other personal effects, medical expenses during your travel, accidents, and death during the travel. Other travel insurance policies cover the expense of damages to rented vehicles and personal property, the cost of replacing lost passports, and even the cost of paying ransom in case of kidnapping. Since you never know what to expect when travelling, it is better to be safe than sorry.

(This article was originally published on BankBazaar.com)