The three things you should surely insure

As the country inches towards the "developed nation" tag, its people are diligently walking the extra mile to get the most effective of educational degrees, the best paying jobs, besides aiming for higher standards of living.

This journey to the top calls for tremendous discipline, not to mention hard work; and along the way most people tend to spend heavily on creating assets. Life is risky. A simple accident, for instance a house fire, has the ability to burn a massive hole in our pockets.

Fortunately, insurance provides us with the opportunity to reduce the risk we face. There exist three key insurance policies that, if taken after prudent deliberations, make life safer.

Health first

The first, and perhaps the most critical, policy to have from a safety standpoint is health insurance. Planning for an unfortunate event such as a disease or a sickness helps maintain peace of mind. Today, with an increase in urbanization, the chances of us contracting respiratory ailments or heart diseases are high. In the light of prevailing living conditions, it is nothing short of necessary to go for a health insurance cover.

Home next

Home insurance is another essential today. Investing in real estate, if done judiciously, offers great long-term returns. While it boards well as a non-depreciating asset, an event such as a natural calamity can cause damage and losses that can set the owner back by a good few lakhs, if not more. A basic home insurance policy shields us from the probability of losing saved money by paying the costs of repairs and renovation when a natural disaster occurs. 

Vehicle protection

The third must-have is motor insurance. It protects people against financial losses of three kinds.  First, when they incur property damage to a personal vehicle on account of an accident or during non-accident cases such as vandalism.  Second, when an accident caused by the person has resulted in damage to another person or their vehicle. Third, when the person sustains significant injuries in an accident. 

Make the right pick

Insurance houses across the country have varied and differentiated plans. Before singling out an insurance policy, it is important to look extensively. Given below are a few pointers to keep in mind while choosing an insurance policy.

i. Study the quality rating of the insurance company you are considering, as published by main rating agencies in comparison with their peers.

ii. Check to see if it is easy to speak to a person at the company.

iii. Do a comparative analysis to find out if the company's policy premium is cost-effective.

iv. For health insurance cover, it is essential to check on sub-limits on room rent, disease-specific sub-limits, cover for maternity, OPD expenses etc. 

Lack of insurance can weigh you down in more ways than one. That is why it is essential to weigh your options and choose well. When it comes to insurance, a key tenet to keep in mind is that saving money now at the risk of hurting yourself later is no prudence.

Puneet Sahni, Head Product Development, SBI General Insurance