BankBazaar.com CEO Adhil Shetty explains importance of various insurance instruments available

Though there are lots of financial plans that promise to protect future but the best way to make the future safe against any kind of uncertainty is insurance. Insurance provides security against sudden death, loss or damage to property, accidental and theft security to vehicles, etc.

By taking up a proper insurance plan; one can secure himself from almost any possible financial uncertainty. In today?s world, there are varied products present in the market, which can be taken to secure any particular object. Those days are gone when there were only a few insurance plans present in the market like life insurance, vehicle insurance and general insurance. At present, the insurance plans cover the following type of risks:

* Any particular organ or part of the body.

* Health insurance for critical illness

* Insurance related to cyber world

* Kidnapping and ransom

* Travel risks

* Cash risks

* Jewellery and ornaments

* Flood and earthquake

* Mobile phones and accessories

But one has to be very selective in purchasing policies as all policies are not meant for everyone. Here is a list of insurance products that should be avoided if there is no necessity surrounding it.

Flood & earthquake insurance

This insurance provides security against the losses that may occur to the property and belongings of the insured due to flood/and earthquake. However, these types of natural calamities happen rarely. However, those living in flood prone areas may take such policies.

Kidnap and ransom Insurance

Kidnap and ransom insurance covers the risk that may lead to financial pressure occurring due to heavy money demand in the form of ransom in lieu of Kidnap. Though all companies don?t provide these policies, a few companies do have such plans. The risks covered under such policies are very uncertain i.e. it may occur or may not occur. 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.

Credit card loss

This policy provides security against probable financial loss that may occur in the event of a loss of a credit card. The loss may arise in form of misuse of the card, withdrawing cash on the card; purchases made through the card, etc.

Almost all the credit card companies or banks nowadays provide for the security against such losses. They immediately block the card on receiving information about such loss of card. So, taking such insurance should be avoided.

Disease insurance

Good health insurance policy covers all major diseases related to heart, kidney, cancer, etc. They also provide for regular health checkups, 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 above the age of 50. There is no such product available in the market that completely covers senior citizens. All products in this category are very rigid in terms and conditions, and costly too. Person taking such policy has to compromise and settle for a lot for claims. Further, the existing diseases are not covered under such plans. Such policies should be taken at the right age or else should be avoided.