Life is full of uncertainties. Untimely death of an earning member of a family, meeting with an accident, having a critical illness or a fire or burglary at one's house may cause immense financial loss and even irreversible damage to someone. To minimise the risk of financial losses due to unforeseen eventualities, people should therefore take adequate insurance cover. So, insurance is nothing but an arrangement of transferring risk to a financially better off entity, that is an insurance company. What insurance covers you should have: 1. Life insurance: Death is absolute, but risk arises due to untimely death. While the risk of living too long may be managed by proper financial planning and taking pension plans, to manage the risk of early death, one should take adequate life insurance cover. The rationale of taking life insurance is to ensure that the financially dependent family members may maintain the standard of living in case of early death of the earning member. So, insurance should be taken to cover the earning life of the insurer and the sum assured should be enough to replace the loss of earning due to early demise of the earning member. As endowment insurance plans are expensive and the rate of returns is low, it is advised not to mix insurance and investment. So, one should take adequate life cover through a low-premium term insurance plan, where only the nominee gets the insurance money in case of death of the insurer, and for investment, should select products with better returns. 2. Health insurance: To avoid over crowding and long wait for treatment in government hospitals, people visit private hospitals, where the cost of treatment is high. In case of prolonged illness, the cost of treatment at private hospitals may exceed one's capacity to pay and may drain out all the savings apart from derailing the investment plans. Moreover, the inflation in the healthcare sector is also very high. So, it is very important to take an adequate health insurance cover without waiting to get ill. So, the motive of health insurance is to make the unpredictable expenditure in case of hospitalisation, a predictable one through annual premiums. 3. Critical illness insurance: Prolonged and repeated hospitalisations in case of critical illness not only put stress on one's finances, but may make a person even jobless. So, a critical illness like cancer or heart problem or kidney failure etc may wrack a person financially. In such cases, a person, who has taken a critical illness cover, gets the sum insured in lump sum irrespective of expenses made for treatment so far. Generally, the condition under this policy is that the policyholder will get the money if he or she survives at least one month from first detection of the critical illness. Apart from standalone plans, one may opt for cheaper critical illness riders available with health and life insurance plans. 4. Third party insurance: It is a liability insurance, in which the insured (first party) gets cover from insurance company (second party) for any loss or damage to a person (third party) where the first party is responsible for causing the loss or damage. The third party cover is compulsory for motor vehicles because in case of death or injury of a third person due to an accident, the claim amount may reach lakhs or crores of rupees depending on the financial status of the affected person. So, the liability towards the third party in such cases is unlimited and hence one should take insurance to pass the risk to the insurance company. Apart from vehicles, this insurance may be taken on any machinery or apparatus, operation or use of which may cause damage to a third person, for example a lift. 5. Householders insurance: Home insurance protects a householder from damages caused by an array of events like fire, earthquake, flood or other natural calamities as well as damages due to burglary and house breaking. An all-risk householders policy even covers your plates and glasses to a bicycle along with valuables like gold and jewellery. It also protects you in case of loss of baggage while traveling and from losses due to personal accident, and covers even claims of a third party caused by an insured event. So, householders insurance\u00a0is a very comprehensive and useful insurance, which everybody should consider.