Home Articles This Insurance Awareness Day understand the significance of financial security

This Insurance Awareness Day understand the significance of financial security

by Pankaj Verma (Head (Underwriting), SBI General Insurance)
Jun 27, 2021
This Insurance Awareness Day understand the significance of financial security, Article, KonexioNetwork.com

Protection, safety, security, have become more significant than ever before. Their importance has been underlined by the pandemic. While people are taking multiple physical measures to stay safe like wearing masks, sanitizing, adopting a healthy lifestyle, exercising etc., that is far from enough in the face of adversity. We strive to keep ourselves, our families, always protected but despite that we might be faced with unforeseen circumstances, unannounced.  Here, Insurance will help in avoiding such emergencies from turning into to financial crises.

We must also consider scenarios beyond our control, be it a health emergency, a natural calamity, or an accident. If you view it from a wholistic vantage point,  the focus is currently on health but it is as important to secure your home, vehicle, property or anything that you value with insurance.

Insurance and its reach in India.

The past year has given a boost to insurance awareness. Staying insured is staying protected – the common adage has come true for many. Those with adequate insurance have had less to worry during the tough times and could get back on their feet quickly. This has led people, who were previously uninsured to consider buying the right insurance cover.

Unfortunately though, insurance penetration, on the whole, is still abysmal in the country. Though adequate and relevant insurance is the foundation of good financial health, people sometimes avoid it considering the complexity of the subject, not understanding one’s risks and so on. But it is time that one should understand that unexpected incidents and accidents can lead to major financial instability and may lead to distress, as we saw last year. In a country where a significant part of the population dips into their savings to meet rising medical costs, low insurance penetration can impact the entire economy. Protection in the form of insurance can help avert such disasters.

Health Insurance, so we can stay safe

The basic insurance all of us must have is, of course, health insurance. Not just any health insurance, but the right one based on age, lifestyle, living condition, and health.  The benefits are plenty, from cashless treatment, coverage of pre and post medical expenses, ambulance costs etc, besides the benefit of income tax under section 80D.

Choosing the right health insurance.

Picking the right insurance product is perhaps the most crucial part of the purchase process. While choosing a plan, look for all the benefits the policy has to offer.

Check out the network hospitals in and around your area. Shortlist your family’s needs first, check out the amount and type of treatments you may have incurred in the recent past to understand what your future needs might be. Also, compare out of pocket expenses (co-pay) which will determine how much money you must pay out in times of need. Check the number of days of pre and post hospitalisation coverage, if major common ailments are covered and go through the exclusions in detail. While the premium amount  is important, perhaps more important is the insurance company’s credibility in the market in terms of its claim settlement ratio and legacy. Apart from a comprehensive base policy, it is always advisable to also have a top-up policy.

It’s not only about health though.

Insurance goes way beyond health insurance. It is important to remember that any sudden expenses can burn a hole in one’s pocket. So, if you have a vehicle, then adequate motor insurance is a must. A home insurance can go a long way in guaranteeing your mental peace. With children studying from home and everyone working from home, the probability of cyber frauds goes up, hence a cyber insurance can be handy.

This insurance awareness day, understand the importance of insurance, read a lot more on why insurance is needed and how it can help in safeguarding your and your family’s future. So, choose to make an informed decision today.