Why you should not buy these 5 insurance plans

You may easily skip buying these insurance plans without losing much. Buying any kind of insurance product, after all, should be based on your needs, feels Amit Sethi.

Why to get insured?

Everyone plans for her/his future and wishes to shield it from monetary risks. With the stride of time, monetary pressure may arise in the form of children's higher education, their marriage, business, career, etc. To cover all these, there are several financial products available in the market but the finest product to secure future against any kind of uncertainties is insurance.

Insurance is a product which grants security against mis-happenings like unexpected death, accidental and theft security to vehicles, loss or harm to property and belongings, etc.

Choice of right insurance product may secure one from the losses from any possible uncertainties that may take place in the future.

But is all insurance necessary?

In recent times because of the cut throat competition every company is coming up with various insurance plans nearly customised to fulfill the needs of particular segment of clients. They are providing insurance plans to cover almost every risk associated from life to belongings.

Some of the plans available in the market are related to critical illness cover, insurance-related hacking of websites/cyber crime, kidnapping and ransom insurance, travel insurance to cover risks associated with travelling, any particular organ or part of the body, jewellery and ornaments and costly items and flood and earthquake insurance.

After going through such classes of available covers, one has to think what s/he needs in reality. Are all the products necessary for her/him? The answer is NO; every product is not meant for everyone.

NEXT: Don't buy these 5 insurance plans

Amit sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent 8 years in Equity research and Stock broking sector. He can be reached at amvilube@gmail.com

Some insurance products which one should think twice or resist from buying are discussed below:

1. Kidnap and ransom insurance

This insurance product covers the risk associated with kidnapping. In the event of any case, there may be demand for heavy cash which one would, in normal case not find easy to fulfill. So this policy covers such risks.

Normally, these types of policies are available for terrorist or crime infested areas. So one should think before taking this type of policy as it would be waste of money.

2. Disease specific insurance

Almost all good traditional health plans cover major diseases. They also cover accidental treatment expenses and critical illness. Some of the disease or pre-existing disease is not covered by them.

Particular disease policy covers diseases, which are normally not covered by traditional health plans. However, paying extra to cover these disease for which one can pay from her/his pockets easily is not worth.

One should analyse properly before taking such policies.

3. Flood & earthquake insurance

Flood and earthquake insurance are designed to covers the risks associated with natural calamities. In the event of flood or earthquake, there may be a heavy loss to the property and belongings. So, this insurance covers to pay for such losses.

However, earthquakes and floods don't occur everywhere. There are some particular areas in the country which are affected by flood and earthquake. So, this insurance policy should not be taken by those who live in areas other than that mentioned above.

4 Travel insurance

Travel insurance is meant to cover the losses associated with travel. This covers losses that arise during travelling like accidental treatment expenses, loss of baggage, loss due to delayed timings, loss to any part of the body in accident etc.

But all these expenses are covered somewhere in one's health plan, wealth insurance and life insurance. Further, if the accident happens during travel, the expenses of treatment are paid by railway/airlines as the case may be.

So, taking travel insurance is not worth and the same should be avoided.

5. Money card insurance

Credit or debit card insurance secures the chances of loss that may arise due to loss or theft of such card.

In the case of loss, the card may be misused and false purchases may be made. However, all the good debit/credit card issuing companies and banks nowadays provides proper security for the same, and they also covers such losses.

So, there is no need to take separate insurance for this.

What to do finally?

The business of insurance is growing by tremendous speed in the world of globalisation. The old time is out when there were only few insurance products available in the market like life insurance, property insurance and vehicle insurance at most. Now there are so many products available, which may fulfill everyone's requirement.

However, one should properly analyse her/his needs and conditions before s/he plans to purchase any policy. There are many unnecessary products available in the market, you need to focus on only such products, which suit your requirement and there's no need to think anything apart from that.