What if you suffer from a sudden disability, forcing you to give up your job or income?
Disability can deplete your finances without warning.
So, what is the way to manage this?
Have you heard of disability or personal accident insurance?
In this episode, Anmol talks about Disability Insurance and more...
Who is it for?
How do you get one?
and How it can help you manage this uncertainty.
Are there any burning questions giving you sleepless nights? Write to us at firstname.lastname@example.org
Disclaimer: This podcast is for educational purposes only. Anything said should not be construed as advice. If you're interested in our financial planning service, visit us at www.7prosper.com
Pardon me for sounding so insensitive when I talk about death or disability or someone becoming a financial liability on the family.
But these are the concepts which everyone should understand and someone has to speak the truth.
Hi, I am Anmol Gupta from the show "Money Ki Baat". Today I am going to talk about a new type of Insurance. Few of you might have heard about this Insurance.
You must be thinking that I often come up with new topics on Insurance, like, Term Life Insurance, ULIP, Health Insurance or Corona Kavach.
Life is full of uncertainties which need to be indemnified. If you remember, I had spoken about Mr. X in the episode on Term Life Insurance.
We assumed that Mr.X is the earning member in his family. His spouse and his children are financially dependent on him. In case of Mr.X's untimely demise, his family will fall into financial trouble, right? To cover this case, Mr.X needs a Term Life Insurance so that his family will get sufficient amount of money in case of his untimely demise and they will be able to live the rest of their lives with financial stability, right?
Emotionally that loss cannot be covered, but financially we can.
We'll talk about another case today. Let's say, Mr. X meets with an accident while travelling to his office. He meets with a very serious accident. If he dies in that accident, then Mr.X's family will be in a financial trouble.
In such a case, Mr.X's family can claim the Insurance amount of Mr.X's Term Life Insurance and with that money they can spend the rest of their lives with financial stability.
Let's take an example of another case, Mr.X meets with an accident, but fortunately he doesn't die. However, Mr.X is badly injured and he needs to be hospitalised.
For few days, Mr.X might need to stay at the hospital and bear the expenses for his medical surgeries which are considerably high. In this case, his hospital expenses will be covered by his Health Insurance policy.
Mr.X will approach his Health Insurance company, state all the details of his accident, and will claim the benefits of the policy. In this case, Mr.X's situation is sorted.
There can be a third case, where Mr.X meets with an accident and fortunately, he didn't die. Mr.X got hospitalised but he also got some serious disabilities. For example, he lost both his hands in that accident. As long has Mr.X is in the hospital, he can claim his surgery and treatment costs from his Health Insurance company. But when Mr.X gets discharged from the hospital, he does not have his hands anymore. In the absence of his hands, Mr.X will no more be able to do his job. He has lost the ability to do any kind of job and earn for his family.
In this case, his family will face financial problems, right? This is because Mr.X was the sole breadwinner of the family. And since Mr.X will not be able to work and earn money, what will his family do?
If Mr.X approaches his Term Life Insurance company saying that he has lost his ability to do any job, and try to claim the Insurance cover, the company will not accept his request because as per their terms and conditions, they only agreed to pay the Insurance cover on the death of the Insured.
If Mr.X, on the other hand, approaches his Health Insurance company, saying that he has lost his earning ability because of this accident and is no more able to do his job, health Insurance Company will still not compensate for his loss because they had agreed to pay only for his hospital expenses.
Disability Insurance is a type of Insurance which typically covers this particular case, or we also have Accidental Insurance.
In case of Disability Insurance or Accidental Insurance, if you meet with an accident and be incapacitated temporarily or permanently like, you lost the ability to work, lost your hands, eyes or any part of your body due to which you'll not be able to work properly or not be able to work at all. Right?
In that case, the Insurance company will pay you the total Insurance coverage, so that you don't fall into financial problems. This is covered neither under Term Life Insurance nor Health Insurance.
Health Insurance will cover you as long as you're in the hospital. Term Life Insurance will only cover you in case of your death.
However, meeting with an accident and losing your ability to do a job is a very serious situation. To cover that case you need to take a Disability Insurance or Personal Accident Insurance.
In my opinion, having a Disability Insurance or a Personal Accident Insurance is even more important than having a Term Life insurance. This is because, if an earning member loses his earning ability and gets incapacitated due to which he can't work anymore, then instead of supporting his family financially, he will become a financial liability for them.
So its very important that any earning member in the family should have a Disability Insurance or a Personal Accident Insurance.
Pardon me for sounding so insensitive when I talk about death or disability or someone becoming a financial liability on the family. But these are the concepts which everyone should understand and someone has to speak the truth.
So, I hope you have understood about the importance of Disability Insurance or Personal Accident Insurance.
In India, very few people know that these type of Insurance policies exist.
When you take a Term Life Insurance, you can get these benefits as an add on or a rider.
There are very few companies that offer a stand alone Disability Insurance or a Personal Accident Insurance.
In the upcoming episodes I'll talk about various schemes available under Disability Insurance and Personal Accident Insurance and the features that you need to consider before taking such Insurances.
But, the bottom line is, you must have a Personal Disability Insurance, if you're an earning member in the family.
So far, I have talked about four types of Insurance policies which are necessary for an individual.
First, Term Life Insurance. If you're an earning member in the family, then you need a Term Life Insurance.
Everybody requires Health Insurance. It is very common and also most of the corporate sectors offer Health Insurance to their employees.
Third, is Corona Kavach. If you get infected with Corona virus, then your Home treatment expenses will be covered under that policy and if you don't have a dedicated Health Insurance Policy, then even hospitalisation expenses will be covered by the Corona Kavach policy.
And the fourth one is, Personal Accident Insurance or Disability Insurance. If anyone loses earning ability due to his or her physical disability caused by accidents or any other reasons, in that case, his family should not fall under any kind of financial burden. Therefore, in that case, we need Disability Insurance or Personal Accident Insurance.
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