ALL YOU SHOULD KNOW ABOUT YOUR GENERAL INSURANCE
When was the last time you received a call like this:
“Hello Sir, Good morning/Afternoon/evening, I am calling from XYZ insurance company. We have recently launched some very good health/motor/home/etc./etc plans. Would you be interested? There is a huge saving also…….”
I am sure not a very long time has lapsed. With 12 private and 4 public sector players, with nothing to differentiate their offerings except price, this sort of scenario is well expected. Since, the Indian consumer is still hardly conversed in the general insurance, the whole issue gets as boggling and the relativity theory for a commerce graduate.
WHY GENERAL INSURANCE FOR AN INDIVIDUAL/FAMILY?
1. General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary et al. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged can be covered through General Insurance policy.
So, never be taken up by those claiming to provide you with financial benefits from a general insurance policy. It doesn’t pay any income; it merely indemnifies you against any loss, in monetary terms.
2. Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one's liability towards others can be covered under general insurance policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance and Public Liability Insurance have been made compulsory.
Always make sure that policies like motor insurance, fire insurance (home insurance), professional indemnity and other proprietorship policies cover you for third party losses. It makes no sense to go in for them without such coverage.
THINGS TO LOOK OUT FOR IN INDIVIDUAL G.I.:
1. HEALTH INSURANCE
• Income tax benefit under section 80(D). This is up to Rs. 15,000/- and can be claimed for only policy per person.
• Updated list of hospitals covered under cashless facility.
• Diseases which are not covered.
• Time period after which pre-existing would be covered. However, always remember that those which ail you before the policy period would never be covered.
• Generally, floater coverage of 4-5 lacs for a family of 4 is sufficient and should be preferred. An individual coverage of 3 lacs is generally quite enough for person aged 40-50 years.
2. MOTOR INSURANCE
• Get a covernote/policy issued well before 4-5 days in advance of your last year’s policy’s expiry.
• A covernote is valid for 30 days only. Ensure that you have a full-fledged policy in hand before then.
• An updated list of garages offering cashless facility.
• The IDV (insured declared value). It would depreciate about 5-10% each year. Never accept anything below this even if it means a little higher premium.
• The coverage should include owner-driver (if you self-drive), paid driver (if you keep a driver), and unnamed passenger (as per the seating capacity of the car).
3. HOME INSURANCE
• Ensure that you get building and contents coverage.
• Always remember that the cost of land is never included in the insured value of your home. Do not let that increase your premium.
• The basis of insurance should be re-instatement value, which means the value you expect after that many years for which you take your insurance.
• Home insurance can be done up to 20 years at a stretch currently.
• Do take a cover against Fire and allied perils, Burglary & Theft and Optional cover for terrorism and additional expenses of rent for alternative accommodation.
• Among contents, cash, bullion, painting, works of art and antiques is never covered. For all else, provide an estimated value to insurance company and always insist on getting a copy of same along with your policy.
Besides, these policies, there are other tailor made policies like Travel insurance (which is mandatory in most of the countries you travel), overseas medical insurance for students, professional indemnity policies, office package policies etc. For all these policies, ensure that you list down what all you wish to cover and then search for suitable policy. Do not be misled by any and every promise the sales person is likely to make, ask for the proposal form and policy draft in advance, this is your prerogative.