At the end of 2020, Annika had been working for over 8 years. With everything that the year had brought and the toll it had taken, she decided to take a career break. A much-warranted, needed and earned break! By February 2021, she moved on from her corporate job. And, with this, she also lost her benefits.
What hit us in April 2021 was unexpected in the most horrible way. There is almost no family in the country that was not affected by the second wave of COVID. Some, of course, had it far worse than others. Annika had three of her family members hospitalised for low oxygen levels - these were hospitalisations that ran into a couple of weeks. Her husband works with a leading multinational and has about Rs 5 lakh of health insurance that covers all his family members. In these circumstances, that insurance was far too less a cover to protect multiple members. The family had to dip into their savings to cover the bills - not a situation one wants to be in, in already distressing times.
One hospitalisation can unfortunately lead an entire family into bankruptcy. It may sound morbid, and something no one likes to think about. If there’s anything that the past year has taught us, it is that adequate insurance is an absolute need-to-have, and isn’t something that we can postpone or ignore. Families have lost their sole earning members. In the case of dual income households, the absence of life insurance threw the family’s financial future into jeopardy.
Once Annika’s family recovered, she took some quick measures and sought health insurance - both family floater covers and individual covers. It took a couple of months post COVID recovery, but she realised the absence of her employer’s cover had hit the family hard and they should have had personal health insurance covers in place.
No one wants to fathom worst case scenarios. Unfortunately, those scenarios can get real faster than we can cope with.
So, here’s what you need to do:
Adequate Health Insurance Covers: Keeping inflation as a factor, coverage of at least Rs 7.5-10 lakh per adult is a must. So, if there are 2 or more adults, you might need a Rs 15-20 lakh health insurance floater.
Family Floater Plans for Kids: A family floater should be used to cover kids, since children are not eligible for individual covers.
Plans for Seniors: for family members over 65, there is no plan available. You might need to take care of this requirement by building savings and investments.
Term life insurance: If an individual is financially contributing to the family’s objectives, she needs a pure term life insurance cover. For coverage, 10 times the annual income is a good place to start. Ideally, you should work with an insurance advisor, factor in inflation, and various life goals and aspects to come up with the right cover and plan that could work for you.
(Dipika Jaikishan, Co-founder and COO at Basis, financial services services app designed for women.)
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