Half the country’s population is now an agent. So it is quite unlikely that nobody has approached you with a “you must have this …insurance policy” kind of spleen. However, you may or may not have agreed. Most of us doubt the credentials of the person who pitches any product to us. Insurance is worse. However there are some insurance products that you must have:

1. A simple term life insurance: whoever called this product a “life” insurance is wrong. It is actually a cash flow insurance. If you have a motor car insurance your motor car gets replaced. If you have a factory insurance, and if your factory were to be burnt down, your factory gets replaced. HOWEVER, if you have life insurance, LIFE does not get replaced. The cash flow gets replaced. So let us call this an insurance product which give your dependants cash to chase their dreams and live their normal life.

2. Medical insurance: If you were to fall ill, it is nice to know that there is somebody to take care of the bills – most of it. It is much better to get a cheque for Rs. 2,30. 435/- rather than just a get well soon card. It is a must if you are the main provider in your house. Also necessary if you do not have a big corpus into which you can dip. Typically a rich person may / may not have this insurance, but if you are middle class, you cannot afford the LUXURY of NOT having medical insurance.

3. Critical Illness / Dreaded disease insurance: Most people realise that they will live to the age of 72 or thereabouts. However most people do not realise that they could be hit by cancer, kidney failure, heart disease, stroke, etc. at age 43! If you are alive, but cannot earn who will pay the mortgage, school fees, car emi, etc? Well this policy will pay a lumpsum (immaterial of the amount spent – this is not an indemnification).

4. General Insurance: Nowadays the value of the household items is quite low. A person with a Rs. 30L salary may not have household goods worth more than Rs. 5L at home – washing machine, fridge, a/c, etc. so it may not be very relevant. However, if you have valuable stuff at home, please insure it!