How to know when you need insurance


Two calendars hang on a wall - Note and Coin each looking at their own calendar - in each calendar, a date is circled and labeled “INSURANCE” Two calendars hang on a wall - Note and Coin each looking at their own calendar - in each calendar, a date is circled and labeled “INSURANCE”

When you bring up the concept of insurance, the general tendency of people is to ask ‘why is insurance important?’ The lack of awareness of the need for insurance among Indians is a major hurdle that needs to be actively addressed. 


The importance of insurance can not be stated enough. It provides you and your family the necessary financial protection that you need to tide over contingencies and unexpected and untoward incidents. But then, how do you know when to invest in an insurance plan? If this is something that you’ve been wondering for some time, here’s the answer. 


When do you need life insurance?

Life can be extremely unpredictable. You never know when you’re likely to be faced with an untoward incident. A life insurance plan can protect your family from financial hardships as a result of your untimely demise. So, when is the right time to purchase life insurance? 


The ideal time for purchasing life insurance, however, is as soon as you start earning for the first time. This way, you can ensure that your family stays protected in case something were to happen to you. 


That’s not all. When you add a new life goal such as the purchase of a new home to your wishlist or when you move from one stage of your life to the next, it is advisable to have a life insurance plan by your side.


When do you need health insurance?

Considering the ever increasing cost of medical treatment, the need for insurance that covers those costs is now more important than ever. This is true even if you’re seemingly fit and healthy leading an active lifestyle. But when should you opt for a health insurance plan? 



  • When you are young 


While it may seem unnecessary to invest in health insurance when you’re young, it is advisable to do so. A health insurance plan covers not only major illnesses, but also day care, OPD, and emergency procedures as well. Also, the premiums tend to be lower when you purchase health insurance when you’re young. 



  • When you have a higher risk for certain illnesses 


Some individuals tend to have a higher risk of developing certain diseases or illnesses. This may be either due to their lifestyle, their family history, or their genetic predisposition. Whatever the reasons may be, if you’re an individual who falls under this category, it is advisable to purchase health insurance as soon as possible. 


When do you need motor insurance?

A motor insurance plan covers damages to your vehicle and third parties as a result of an accident and man-made or natural calamities. The cost of repairing a damaged or broken down vehicle can be quite debilitating, which can be mitigated by possessing a valid motor insurance plan. Here’s when you need to have one. 



  • When you buy a new vehicle 


You wouldn’t want to spend your entire life savings repairing your new vehicle that gets damaged, would you? Especially when you’ve already spent a huge chunk of it purchasing it. Getting a comprehensive motor insurance plan as soon as you purchase a new vehicle can help you avoid all of this trouble. 



  • When you buy a used vehicle 


You shouldn’t skimp on purchasing motor insurance just because you purchase a used vehicle. The chances of a used vehicle breaking down all of a sudden are high, leaving you with a hefty repair bill. But with a motor insurance plan, you won’t have to worry about such incidents. 

When do you need home insurance?

In India, the importance of insurance for homes is vastly underestimated and misunderstood. Insuring your home is extremely important to avoid having to dip into your own pockets for repairing physical and structural damages that may occur due to accidents or calamities. But when should you take out home insurance?   



  • When you buy or build a house


Accidents can happen at any time. When you purchase a new home or build one from scratch, it is extremely important to have it insured even before you move into it. This way, you can ensure that you stay financially protected at all times.  



  • When you move into a rented property


In addition to covering physical and structural damages, a typical home insurance policy also covers the contents within it as well. So, taking a home insurance policy when you move into a rented property can be immensely beneficial to you. 

When do you need travel insurance?

As the name itself signifies, travel insurance covers unexpected losses and expenses that you incur during your travel. But, when should you actually get one? Here’s something that can help you out. 



  • When you are planning an expensive vacation or journey 


Travel insurance is necessary when you’re planning to travel to exotic locations within and outside of India. It is advisable to purchase travel insurance as soon as you book the tickets for your vacation. This way, you can stay protected from unavoidable losses, whatever they may be.



  • When there is a high risk of flight cancellation 


Due to circumstances outside of your control such as a COVID-19 outbreak, flights may suddenly get canceled out of the blue. This can lead to severe losses considering the cost of flight tickets. A travel insurance can help you avoid all of that by covering the losses you incur due to such incidents.


Wrapping up

With this, we’re done with another chapter of this module. You should now be aware of the importance of insurance and when you need one. In the next chapter, we’re going to take a look at the factors that affect the premium of an insurance policy. 


A quick recap

  • The ideal time for purchasing life insurance is when you start earning for the first time and when you move onto the next stage of your life. 
  • Health insurance is necessary not only for individuals that have a higher risk for certain illnesses, but also for younger individuals as well. 
  • A motor insurance plan is something that you should invest in as soon as you purchase a vehicle, whether new or used.
  • As soon as you buy or construct a new home or move into a rented one, purchasing a home insurance policy is ideal. 
  • The perfect time to purchase travel insurance is when you’re planning an expensive vacation or when there is a high chance of flights getting canceled.

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