What is Insurance Coverage?
We live in a dynamic world where we are surrounded by uncertainties, and in this uncertain world, we need to mitigate risks to protect ourselves and our loved ones. So, how can one protect oneself from uncertainty?
Get an Insurance Policy!
But what is insurance? It is a contract wherein an individual gets financial protection or reimbursement in case of a loss from an insurance company in exchange for a premium paid. In other words, it is a hedge against a risk of a financial loss. You can find the history and meaning of insurance in this blog.
What is insurance coverage?
Insurance coverage is the total risk coverage an individual gets from the insurance company in the occurrence of an uncertainty. Let’s say, that Mr. A bought himself a Life Insurance policy of Rs. 1 Crore so as to protect his family’s financial needs in the event of his untimely death. Here, the sum of Rs. 1 Crore is the insurance coverage.
For this coverage is provided by the insurance company when Mr. A pay them a premium. Premium is a small fee which the insurance provider gets in return to safeguard an insured individual. Premium to an insurance cover is calculated by taking various factors into consideration. These factors can be age, medical condition, physical fitness etc.
Okay, so getting a insurance seems useful, but is it really important to calculate and know about the insurance coverage? Isn’t it enough to just get an insurance?
Why is Insurance Coverage important?
Provides a sense of safety:
We and our businesses, both are prone to risks at every stage of our life. And this risk can eat us up. Insurance provides us with a sense of relief that all the uncertainty is covered for.
Provides a cushion to families:
The earning member of the family should always have insurance cover, as you never know when a mishappening may occur. One should carefully calculate the amount of money one’s family should get in case of his absence, as it is the only thing which the family would rely on in case of an untimely death.
It reduces stress:
It is quite obvious that the stress level of an individual can shoot up during times of uncertainty. Getting an insurance would reduce this emotional and financial stress as he can say that he is financially secure against any kind of burden the uncertainty brings.
Now, you might be thinking that getting an insurance is vital for your financial and emotional wellbeing, but how to calculate the insurance cover.
Types of Insurance Cover
There are a variety of insurance products in the market which cover for different risks. We have listed below some of the commonly used Insurances and what they cover:
It is one of the most commonly invested insurance policies. It mainly focuses on safeguarding the family's financial needs after the death of the policy holder. There is a different type of insurances which focus on this niche; to name a few, money back, endowment and term insurance plans. If you want to learn more about these plans, you can click here.
As the name suggests, it focuses on the policyholder’s health. Here, the insurance co. reimburses the amount which the holder pays while he gets admitted to a hospital. You can take health insurance for a particular disease or any illness. Did you know? You can even claim reimbursement for visiting doctors. If you are planning to buy a health insurance, you can click here, to find out the key things to look at before buying a health insurance.
It is an insurance, wherein the house or the property of an individual is insured against any kind of damage. It mainly protects the house against any kind of calamity such as fire.
There are different insurance plans for different things, one can choose from a variety of options. You must select a plan which best suits your needs. You can nowadays take insurance against your mobile, laptop, car and even your spectacles. Just be sure that the co. which is issuing you the plan has a great claim settlement ratio.
How to calculate appropriate insurance cover?
First of all, you must know that different insurance policies cover different risks. There are policies which cover your Life, Health, Property, Car, Mobile etc. You need to decide what risk you want to hedge and then decide the amount you would like to receive in the occurrence of that event. You can calculate your life insurance coverage by keeping in mind your family’s total yearly expenditure and then multiplying it by the no. of years your family would take to get back at self-sufficiency. It would be different for everyone as it totally depends on your family’s expenditure. There is one other thing which you need to calculate and know before buying a life insurance. It is the way how your premium would be calculated. You can find more on that here.
We live in a world where there is a lot of uncertainty; By buying a good insurance plan, you can rest assured that you are in safe hands. So, what are you waiting for? Buy an insurance today!!
Why should we consider insurance cover?
Insurance Cover is a crucial factor which you need to consider as it is the total claim you would be getting in the occurrence of an unfavourable event.
Can insurance companies deny coverage?
Yes, Insurance companies can deny your coverage/claim if they feel that there is something suspicious. It is advised to buy insurance from trusted companies which have good claim settlement ratio and you should always keep the evidences ready while the company asks for one.
What type of insurance is required by law?
There are certain requirements which are laid down by the government for driving a motor vehicle. That is, you need to have a car insurance to drive your car on road.
Who provides health insurance coverage?
The coverage is provided by insurance companies. Insurance companies charge a premium from its customers to safeguard them. They have 100s of such premium payers. A part of the pool is paid to the one who incurs such disease.
How much insurance coverage is enough?
It totally depends on you. You need to calculate your required insurance cover for yourself. To calculate Life cover, you can calculate your yearly expenditure and then multiply it with no. of years (till the time your family becomes self-reliant). You can calculate health insurance cover by calculating the average charges of the concerned illness.