Nupur Pavan Bang
Having realised the importance of Insurance, Mukherjee had bought a Life Insurance policy last month. However, he was still a worried man. He caught up with Professor Nicky near the joggers park in their gated community.
Prof. Nicky: Hello Mukherjee. Good to see you. What brings you here? I thought you were not the jogging types.
Mukherjee: You are right. I never jog. I came looking for you. I bought a life insurance policy last month which will protect my family in the event of my untimely death. But what if something bad happens when I am still alive? What if there is a theft or a fire in my house? What if I meet with an accident and need a lot of money for the hospital? How will my family and me handle such an eventuality financially?
Prof. Nicky: What you need is insurance against these eventualities, for peace of mind. There are insurance policies for fire, theft, accident, health, etc. These are together known as general insurance and are sold by ‘non-life’ Insurance companies. In fact some of these policies are now a day’s made mandatory by the government.
For example, the third party liability insurance if you own a vehicle. Many companies provide medical insurance to their employees as part of the compensation. Banks insist on an insurance on property if you are taking a loan against property.
Mukherjee: But what about me? I am a businessman. And I have not taken a loan against my property. Its ancestral!
Prof. Nicky: Then you buy it on your own. You must insure your property against loss or damages. Most of the general insurance companies determine the premium based on the value of the property and the sum assured. When determining the sum for which you want assurance, you should keep in mind things like anticipated damage in the event of a fire or explosion. How much will it cost to renovate? What all do you want covered-Only the property or the fittings and fixtures as well?
Mukherjee: So you mean that the insurance company pays for the furniture and fittings as well?
Prof. Nicky: Absolutely. Just your premium will go up. Not only this, they will cover injuries to you as well if you want, under a ‘house holders policy’.
Mukherjee: Amazing. How about accident and medical plans?
Prof. Nicky: There are many different types of medical and health insurance policies. Depending on the terms of the policy, they can cover you expenses from hospitalization to diagnostic tests, to medicines, ambulance and other related expenses. Under accident covers, you may buy policies that cover you and your family for permanent or temporary, total or partial, disability. You may also seek cover for funeral expenses if you wish!
Mukherjee (gets angry): Professor, please don’t joke.
Prof. Nicky: Mr. Mukherjee, I am not joking. It’s true. I am just trying to tell you that you can buy a policy for anything now a days. It’s you who has to decide what is important for you to secure and insure. For example, film stars ensure their body parts, because their fame and success depends on those attributes.
Mukherjee: You finance people are genius! You make a product out of everything!