Cherry-picking in insurance plans

Financial planning for the future is one of the important processes in our life. The planning could be either for your children’s education or marriage or business. However, planning for unforeseen incidents are really crucial. And insurance is the only product that could help you on this front. It provides security against unforeseen incidents such as sudden death, loss or damage to property, accidental and theft security to vehicles. Gone are the days when insurance options for people were limited. In today’s world, there are a variety of products in the market, which can be taken to secure any particular object. Currently, the insurance plans cover only the following type of risks: * Any organ or part of the body. * Health insurance for critical illness. * Insurance related to cyber world * Kidnapping and ransom * Travel risks * Cash risks * Jewellery * Flood and earthquake * Mobile and accessories But do we need to subscribe for all these? Not really. Everyone need not buy all policies. You have to buy insurance only if you need it. Here is a list of insurance products that should be avoided if there is no necessity. Flood and earthquake This product insures you against the losses that may occur to your property in the event of floods or earthquake. However, if you are not living in areas which not prone to these calamities, you need not purchase these products. Kidnap and ransom Kidnap and ransom insurance covers the risk that may lead to financial pressure occurring due to heavy money demand in the form of ransom. Though all companies don’t provide these policies, a few companies do have such plans. The risks covered under such policies are very uncertain. The chance of such an occurrence of this type of risk is negligible and that too restricted to terror affected areas. So the need to have such policies should be analysed properly, and should be avoided where not needed. Credit card loss This insures against a probable financial loss in the event of the theft of a credit card. Almost all the credit card companies or banks immediately block the card on receiving info-rmation about such theft. So you may avoid taking credit card insurance. Disease insurance Good Health Insurance policy covers all major diseases related to heart, kidney, cancer, etc. They also provide for regular health check-ups, accidental treatments, critical illness, etc. So any policy, which is meant to cover any specific disease or any disease, which is not normally covered under health policies, should be avoided. Example: Insurance for Vision is a policy to cover risks associated with eyes because most of the traditional health plans don’t cover eyes. However, normally the expenses related to eyes are the cost of lens, specs, etc., which can be easily borne by one without any insurance plan. So taking disease insurance should be avoided. Products for old age Most of the companies, including the specialised health insurance company, hardly cover the members of old age, i. e. above the age of 50 years. There is no such product available in the market, which completely covers the aged or senior citizens. All products for them are very rigid in terms and conditions and costly too. Even if someone takes this policy, he has to compromise and settle for a lot for claims. Further, the existing diseases are not covered under such plans. So taking such a policy should be avoided. Insurance companies are there in the market to do business, and they will keep coming up with different plans to appeal to the customer’s need for security but as a customer, you should use your discretion and buy the insurance products only after a proper research. Every rupee earned by you is precious, and you should value it. So make a sound judgment call before taking up any insurance plan and try to avoid product that is unsuitable for your circumstances. The writer is CEO of BankBazaar.com