The Secret 5: Important Insurance Products No One Will Ever Sell To You!

• Introduction
• 1- Home Insurance
• 2- Personal Accident Insurance
• 3- Two-wheeler Insurance
• 4- Cyber Insurance
• 5- Critical Illness Insurance
• Why are these plans not sold proactively?

When you imagine someone selling ‘insurance’ - what product comes to mind? Let’s guess - you’ll expect either a health insurance or a term life insurance plan. Right? From TV advertisements and financial advisers, to your family-friend insurance agent - health and term insurance products take up so much promotional bandwidth that it is hard to imagine that there are any other useful products at all!

But - this couldn’t be farther from the truth. This selective promotion of only high-margin insurance could leave you unaware of some extremely useful products that protect against the financial impact of highly probable mishaps. 2

And in this article, we take you through 5 such less-known products, you might need - that no one will ever sell you. Let’s dive right in!

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Yes. You heard it right. You can in fact insure the structure of your home, along with all the items that it holds. Available for both owners and tenants of a house - Home Insurance, in our opinion, is one of the most underrated insurance products that you’ll never hear about. 

What does it cover?

While the exact inclusions and exclusions will depend on the plan you pick, here’s an indicative list of objects that this insurance can cover. 

• Structure of the house - interior and exterior
• Fittings and cupboards
• Furniture, television set, refrigerator, laptop, mobile phone and other appliances/ gadgets
• Precious Jewelry
• Clothes
• Cutlery and utensils  etc.

Why is it important? 

Home is where the heart is, right? We put our heart, soul, effort and life’s savings into finalising the perfect locality, a dependable architect, high-quality materials and handpicked furniture so that this long-term investment becomes a place that brings peace and happiness to our families. 

But a single mishap like a fire, a natural calamity, accidental damage or a burglary could turn all your dreams upside down in an instant! 

As of 2017, fewer than 3% of houses in India were insured, compared to developed nations such as the USA, UK, France or Australia where it is over 90% on an average. 

How much does a Home insurance policy cost?

It can be considerably inexpensive to insure your home and the material things you hold dear. Typical premiums for just the goods in the house could be as low as half percent (0.54%) of their value. For instance - a goods-only cover taken by a tenant from HDFC Ergo's Home Insurance Policy for 20 lakhs - was found to be as little as INR 10,738/- (inclusive of tax). 

*Premium has been taken on 17th May 2021

Source: Beshak Research Desk

Things to know:

• Not every policy covers home all types of risks. You must compare all the comprehensive home insurance policies before you zero in, on the one that fits you best.

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We’ve written extensively about the underrated risk of disability and the Personal Accident Insurance several times, and we strongly recommend that every earning member of the family purchases this policy. 

Simply put, it protects you against the financial risk of accidental disability, resulting in increased expenses and a simultaneous loss of income. Based on the severity of the disability a benefit amount is paid - which can be used as an income-replacement for the family’s needs. 
 

What does it cover?

A Personal Accident Cover covers a wide range of accidental disabilities - 

• Permanent Total disability: Situations where you suffer from irreversible injuries with a loss of a core faculty of the body that significantly reduces your ability to earn and live a regular life - such as complete permanent blindness, loss of both hands or loss of both legs. 
• Permanent Partial disability: Situations when you suffer a significant injury that is for life and affects a part of your body like losing sight in one eye, losing one hand or a leg etc. 
• Temporary Total disability: Situations when you are injured for a certain period of time, during which you are temporarily immobile or paralysed and might not be able to work or perform regular activities.

Some policies might also cover for an Accidental Death benefit paid to the nominee,  in case death happens as a result of the accident. 

Why is it important?

There’s a single reason why. Accidents can happen to anyone, anywhere. You don’t see them coming, you cannot completely stop them from happening, and they can happen to the healthiest and most cautious of us! 

• In India, around 1214 road accidents happen daily.
• And an equal number of accidents are estimated to happen at home

And, the financial impact of accidental disability could be even more devastating than the death of the earning member. You might not be able to continue with the same job, while you’ll spend a lot on restructuring the house, nursing, doctor visits, medicines, tests, physiotherapy etc. which won’t get covered by health insurance. 

A Personal Accident Cover will help you pay for all these costs, without compromising your family’s lifestyle. 
 

How much does a Personal Accident Cover cost?

Generally speaking, personal accident covers can be inexpensive. However, you should note that premiums will be based on your risk class. A 15-lakh plan that covers accidental death, permanent and temporary total disability would cost only Rs 2213 including taxes for risk class-1. However, for risk class-3, the same plan would cost Rs. 3540 inclusive of taxes.

*Premium has been taken on 17th May 2021

Source: Beshak Research Desk

You can also get a detailed insight into premiums and comparisons from this article, we’d written in the past. 

Things to know - 

A minimum and maximum sum assured is fixed for your profile by the insurer, and you can choose a suitable cover based on your budget and needs, within those limits. 

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Ok. We know that you’re aware about two-wheeler insurance. But it is important to note, that due to the low value of the product, no sales person will ever follow up with you to buy one, and that’s the point we are trying to make. 

A two-wheeler insurance policy provides financial protection to the vehicle owner against any unforeseen events like an accident, theft or any serious damage to the motor vehicle. 

What does it cover?

Two-wheeler insurance plans are of two basic types. 

• Comprehensive Insurance: This is an extensive policy covering situations such as total loss of the insured vehicle, theft as well as third-party financial losses - ie., losses caused to a person (other than the owner of the insured vehicle) involved in the accident. As an option, you can choose a Rider for Personal Accident cover along with this policy to provide financial relief if disability or death is caused as a result of an accident using this vehicle. 
   
• Third-party Insurance: This is a limited policy that only covers financial losses and injuries caused to a person (other than the owner or passengers on the insured vehicle) or their property because of the accident caused by this vehicle. 

Things to know - 

• It is mandatory for every vehicle in India to have a third-party insurance cover. 
• The comprehensive insurance policy however, is not mandatory.

Why is it important?

Firstly, you must have at least a third-party insurance plan for your two-wheeler, because otherwise you’re breaking the law. 

Plus - if you’ve ever worried about parking in an open area, or on a busy street - your fears are not completely unfounded - bike theft is rampant in our country. To top all this, we know for a fact that our streets aren’t exactly the easiest to navigate, especially if you ride a scooter or a motorbike. 

And - the easiest way to protect yourself against the risk of such accidental damage or theft - is to buy this policy. 

How much does a Two-wheeler insurance cost?

Premiums are fixed depending on the make and model of the vehicle. As a ball-park however, they could vary widely between INR 1500 (for scooters) to INR 25000 (for sportbikes). 

*Premiums were taken on 17th May 2021

Source: Beshak Research Desk

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We bet, most of you have never heard about this! And - it might sound like an outlandish cover only large companies would need. But it’s not really so!

Cyber insurance is a type of insurance that protects you against internet-based financial risks including cyberattacks, phishing scams, data-loss, identity theft etc. In this day and age, where the lines between online and offline lives are thinning by the day - this is a highly relevant and helpful policy to have, so we navigate the digital world with confidence. 

Why is it important?

The financial risk of malicious cyberattacks is real. According to a recent report, Indians face as many as 4000 cyber attacks every day. With increasing adoption of digital banking, payments and ecommerce - the scope and opportunity for cyber-criminals is only increasing by the day. And it is no longer a matter of ‘if’ a cyber attack will happen - but ‘when’. 

This policy is extremely important for the seniors in our house most of who now have a smartphone - with payment apps, netbanking and everything linked - but no clue about the havoc a click on a malicious link on WhatsApp can create!

This simple cyber insurance policy can help you keep your finances safe from such impending risks. 

How much does Cyber Insurance cost?

Cyber Insurance could be surprisingly inexpensive and the premiums are based on the type of losses you would want protection against.  For instance, a basic cover from Bajaj Allianz Cybersafe could cost you as little as INR 662/- for a 50K cover. On the other hand - a 1 Crore cyber insurance cover from HDFC Ergo - e@secure costs around INR 14,273/- per year. 

*Premiums were taken on 17th May 2021

Source: Beshak Research Desk

Things to know - 

• Similar to health insurance - cyber insurance plans as well, come with a range of exclusions and inclusions - which together help you analyse the quality of the cover and whether the features you need are covered or not. Be aware of these lists and carefully understand them, before signing up. 

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The irony of our generation is that we might live longer than our ancestors - thanks to medical science, but will have to endure several serious diseases along the way. And, much like accidental disability - a critical illness too will cost your family way more than even the death of the earning member. 

We’ve heard of senior executives earning crores yearly, having to take up low-paying, less-stressful roles after suffering a heart attack. Such instances immediately impact the quality of life your family enjoys, while crippling your bank balance quickly. 

A Critical Illness insurance is your protection against such a possibility. 

Check out our eBook - The Most Definitive Guide To Critical Illness, for free here!

What does it cover?

Every Critical Illness plan provides a list of illnesses that will be covered by it. In case you’re diagnosed with any of those diseases, you’ll be paid a fixed amount of money. Based on the plan - you should be aware of ‘waiting periods’ for certain conditions, as well as ‘permanent exclusions’ that will never be covered. You should be mindful of these before signing up for any policy. 

Things to know - 

• You can either buy a Critical Illness cover as a standalone policy, or as a Rider along with your term insurance plan. Compare the pros and cons of each option including overall cover, limitations, exclusions, special terms and conditions and cost - before finalising an option. 

How much does Critical Illness Insurance cost?

Critical Illness Riders (bought along with a term insurance or health insurance plan) might cost you considerably lower in the long-run as the premiums stay fixed for a certain duration (or the entire term of the base policy). 

Standalone Critical Illness covers, could be more expensive while providing comprehensive coverage to all your conditions. In this case, the premiums change as you grow older, and could be pretty expensive in your old age. 

We did a detailed analysis and comparison of premiums of all types of Critical Illness covers across brands in our eBook - The Most Definitive Guide To Critical Illness. Do get your copy for free at the above link! 

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Because they are of low monetary value, or have very low margins. For instance, an agent will make less than Rs. 200 on a two-wheeler policy. From the perspective of the insurance company, aggregator or agent - these products take a lot of time and effort to sell - and do not pay off in the same proportion. Further, most buyers aren’t already aware of these products - so more energy is spent in educating the crowd about them. 

As opposed to these - health and term life insurance products are high value, have high commissions, plus some amount of acceptance - people already know they need these insurance plans - and the turnaround for a sale is faster, and rewards make sense to the seller

What’s the final take?

In our opinion, the key lies in understanding our risks, and mitigating them through the most effective tools.  In this hi tech digital world, you don’t need to find an insurance company’s office or an agent to buy a policy. All these policies are available online and can be bought after detailed understanding of the coverage. You have a question? Experts on the Beshak Forum, will help you with answers. 

What can you do? 

For starters, you can help this cause by sharing this article with as many people as possible - so everyone knows and understands these really important insurance products. 

Next, take initiative and start evaluating your own needs objectively - and actively explore these products that could protect you, your family and your assets from financial risks you might never even imagine! 

Remember - you need to buy insurance when you don’t need it - and this holds even for these five less-common products we’ve discussed. So - the better prepared you are, the more likely you’ll overcome a financial crisis when (and not ‘if’) it occurs!

Think this article was helpful? Let us know in the feedback below. 

If you have any questions, you can post them on our Forum - and get answers from insurance experts, for free!