3 Lesser Known Types of Insurance That are Worth Considering

It’s not surprising that insurance has earned a bad rep over the years. The word “insurance” instantly conjures up images of glib, smooth talking sales people that are trying to pull a fast one over you! In fact, it rings true that insurance (especially life insurance) has been heavily mis-sold over the years. Only recently has there been a wave of awareness of the true purpose of insurance as a risk protection mechanism, leading to more and more people seeking out pure risk plans such as term insurance or health insurance. In a similar vein, here are three types of lesser know pure risk coverages that are low cost in nature.

Critical Illness

As the name suggests, a critical illness policy is one that makes a lump sum pay-out in case the policy holder is diagnoses with a critical illness. Some examples of critical illnesses are - Cancer, Stroke, Heart Attack, Coronary Artery Bypass Surgery or Kidney Failure. It’s worth noting that a Critical Illness policy isn’t a substitute for a Health Insurance policy, as the former doesn’t cover accidents. The purpose of a Critical Illness policy is to provide the policyholder with a fixed rupee amount to ride out the tough times (potentially, a lengthy non-income generating period), in case they are incapacitated by such an illness

Heart & Cancer Protection

Technically a subset of Critical Illness itself, a “Heart & Cancer” protect or simply “Cancer Protect” policy makes a lump sum pay-out or a regular pay-out for a fixed duration (depending upon the type of policy) if the policy holder is diagnosed with a heart related condition or cancer. Typically, these policies have a two-tiered pay-out model, wherein 25-30% is paid out if the patient is diagnosed with a minor condition, and the full amount if the patient is diagnosed with a major condition. This policy is particularly sensible if you have a family history of heart disease or cancer. If you’re a smoker, you’ll find this policy very hard to get, though – as most underwriters will decline your request.

Personal Accident

Another simple type of pure-risk cover is a “Personal Accident” policy. In a nutshell, this policy makes a lump sum pay-out or a regular, time bound pay-out to the policy holder (or the policy holder’s family, in case of their death) if he or she meets with a personal accident that could result in death or disability (either permanent total disability or permanent partial disability). If your job entails a lot of traveling whether by road or by air, you should consider taking up a personal accident policy for yourself.