Why insurance is a must have

Insurance protects an individual during bad times. Ignoring it can be disastrous for your finances. Be it life insurance or health insurance, car insurance, or home loan – it is important that a person is secured.

The Money9 Helpline hosted Naval Goel of Policy X  to help our callers understand the importance of insurance cover.

Dhruv Tandon, Noida: I am 26 years old. I have just started working. I have no dependents on my income. Should I buy an insurance policy?

Goel: Yes, you should definitely buy for yourself. A health need can arise at any time of your life. So you should buy a health insurance policy for sure. For a term insurance policy, you can think over it. But if you buy a term policy now, your premium will be less now than what you will have to pay after say 2 or 3 years when you will have a family and dependents.

Ashish Darji: Please elaborate on the taxation part of the top-up premium in ULIP apart from regular premiums.

Goel: A ULIP does not have a top-up premium, it has a normal premium in totality. So basically you can get a tax benefit until you touch the ceiling of Rs 1.5 lakh. There is a lock-in period on ULIPs.

Arka Basu: How important is critical life insurance? It is suggested with a term plan? Premium is very expensive any other way we can cover it?

Goel: The critical illness gets covered in health insurance. But you can buy a separate and specific policy of critical illness.  Critical illness is covered in named diseases. As the probability of such illness is less so premium is not that much. So it is better if you take a critical illness cover.