5 insurance policies you should have in New Year

These plans are very economical, as this policy does not payout if the policyholder survives the policy term. The premium for this policy, however, increases with age.

LIC, IRDAI, 5 insurance policies worth buying, must-have insurance policies, health insurance, Personal Accident Insurance, Term Life Insurance, ulips, Critical Illness Plan
These plans are very economical, as this policy does not payout if the policyholder survives the policy term. The premium for this policy, however, increases with age.


Insurance gives us financial protection in times of need. Depending on the types of insurance, the policyholder gets financial protection in times of accident, serious health issues, untimely death, or property loss. However, that can only be availed by the policyholder if he/she keeps the policy active by paying the premium on time and renewing the policy.

Even though insurance in India is still a pushed product, people are opting for insurance policies. According to the latest IRDAI report, during 2018, total insurance premium in India increased by 9.3 per cent, whereas the global total insurance premium increased by 1.5 per cent (inflation-adjusted).

Samit Upadhyay, CFO and Head Product, Tata AIA Life Insurance says, “One of the first policies should always be one which provides income protection or liability cover to the policyholder and their family in the event of any unfortunate occurrence such as death, disease and disability. Term plans with relevant riders are highly recommended.”

However, despite their importance, all types of insurance are not needed by everyone. There are only a few types of insurance which may be required by a majority of people. Here we are taking a look at a few must-have insurance policies which one must have in one’s portfolio:

Health Insurance

With a steep rise in the medical cost and diseases not being age-specific, having a health insurance policy should be a priority. Health insurance is one of the first necessities an individual should consider while planning their finances. One can opt for an individual policy for themselves or for the family, or opt for a family floater plan under which the whole family gets covered in one policy.

Having this policy protects the insured from unexpected medical situations, by paying their medical and hospitalization expenses as mentioned in the policy. It is suggested by experts to opt for a health insurance plan with the sum insured of at least Rs 5 lakh. Also, with various health plans being available in the market, one should compare them, and then opt for the one that suits one’s requirements the best.

Personal Accident Insurance

A large number of people are killed and suffer disability every day on Indian roads, due to accidents. Policyholders should opt for this, in case they suffer a disability or death in an accident, the policyholder/ policyholders family will get the pre-defined sum assured from the insurer. Srinivasan Parthasarathy, Sr. EVP, Chief Actuary and Appointed Actuary, HDFC Life Insurance says, “Life Insurance is needed to protect the policyholder’s loved ones from unforeseen events such as death, accident, disability, etc. In the absence of the breadwinner of the family, life insurance can provide a safety net to the beneficiaries and help secure their long term financial needs.” Depending on the type of insurance plan and the insurance company, some policies also pay continuously after an accident in the case of a serious injury, to help the policyholder cope with financial obstruction.

Life Insurance

Opting for a term life insurance cover provides financial protection to the policyholder’s family, in case of his/her death. These plans are very economical, as this policy does not payout if the policyholder survives the policy term. The premium for this policy, however, increases with the age of the policyholder. The premium instalment fixed at the beginning of the plan remains the same throughout the policy period, which helps the premium to be lower if one buys the policy at an early age. Hence, experts suggest opting for one at an early age.

Critical Illness Cover

Generally, health insurance plans do not provide cover for critical illness or life-threatening diseases. In such case having a critical illness cover will help the policyholder in case of life-threatening diseases such as cancer, tumours and heart disorders. Treatment for these illnesses is also quite expensive. With some of these illnesses, hospitalizations are not required, and regular hospital visits are required over a long period of time. Health insurance policies usually do not pay under these circumstances.
However, these critical illness plans offer fixed benefit where a lump sum amount is paid to the policyholder for the treatment. The insured can use the money according to themselves. Experts suggest the sum insured of a critical illness cover should be around 4 to 5 times of a regular health insurance plan.


Unit-Linked Insurance Plans are a combination of investment with insurance. These plans offer the policyholder returns from the investment along with a risk cover. Policyholders depending on their risk appetite and long-term goals can choose the type of fund they want to invest in for goals like retirement, higher education of children, marriage, etc. The premium of this policy is also higher.

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