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Do not Ignore Natural Calamities - Insure

 

Do not Ignore Natural Calamities - Insure



Devastation caused by Jammu and Kashmir (J&K) floods has, once again, brought into focus the importance of being adequately insured to deal with the fallout of disasters. As an individual, you can do little to prevent such catastrophes. However, you can take steps to minimise their financial impact.

Life Insurance

Destruction caused by disasters like the one in J&K lead to tremendous loss of lives, leaving the bread earner's dependants financially vulnerable. Such natural calamities bring back the focus on need for protection of life and assets. As a thumb rule, a person needs to have a minimum of 10 times his annual income as life cover. If you wish to carry out a detailed analysis, take into account your assets and liabilities, before zeroing in on the right cover and amount. Also, it is best to go for a pure protection term cover, which is the most cost-effective form of life insurance. A 30year-old non-smoking woman can hope to buy a term cover of Rs 1 crore with a 20-year tenure for just Rs 7,000-8,000 a year.

Home Insurance

Floods and landslides wreak havoc on people's houses, forcing them to start rebuilding their homes. A home insurance is meant to compensate policyholders for losses incurred by them due to man-made and natural calamities. It can also insure the contents of your home and valuables against fire, theft and burglary. As people move out of their houses to escape nature's fury, there is a risk of their household equipment and valuables being stolen. A home insurance that ordinarily comes at cost of Rs 4,000-5,000 a Rs 50-lakh sum insured year for a ` can make good such losses.

Personal Accident

Cover In case of a natural calamity or road accidents, the threat of disability and dismemberment is as daunting as that of death. This is where a personal accident policy can come to your aid. Depending on the product and insurer, it covers accidental death, permanent total disablement, permanent partial disablement, temporary total disablement as also compensation for loss of employment. "This cover costs around Rs 150 per lakh and you should look at a cover of around 12-15 times your annual. You need this cover not only to insure yourself but also possible mishaps you may encounter in your day-to-day life.

Health Insurance

The need for health cover is obvious in times of floods when the threat of epidemic looms large, but it is a must-have policy even otherwise. "With rising healthcare costs and increasing incidence of lifestyle diseases, you must buy this cover for yourself and your family, especially once you cross the age of 38 to 40 years. Most health insurers insist on medical tests post the age of 45 and hence, buying this cover by 40 makes a lot of sense. Buy this policy even if you are covered by your employer's group health cover. At this age, you should buy a cover of at Rs 6 lakh, which can be enhanced to Rs 12-15 lakh over the next 8-10 years. For this age group, the annual premiums could be in the range of Rs 16,00018,000," he adds.

Motor Insurance

Destruction by calamities invariably include cars and other vehicles damaged due to the disasters. An own-damage insurance can help you tide over the crisis. While a third-party liability cover is mandated by law, an own-damage cover can take care of losses due to vehicles getting submerged or washed away during floods.

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