The year 2020 has been an unexpectedly wild ride for everyone due to the COVID-19 pandemic. The uncertainty bred by the pandemic has reinforced the gravity of long-term financial planning like never before, with insurance acquiring top priority as a financial instrument. Indian Insurance companies too, have been quick to adapt to the pandemic’ norms of social distancing and quarantine, and digitize their businesses with incorporation of superior technologies. As we begin our journey into 2021, the types of insurance that you may consider could be broadly based on two categories:

a) Self and Family based insurance

b) Asset based insurance

Self and Family Based Insurance

• Term Life Insurance: The need for term life insurance has remained much understated in India, and in 2020, the COVID-19 pandemic has awakened the people to the importance of availing a term insurance life insurance. Locked up in their homes for a large part of 2020, the loss of lives during the pandemic has indicated that life is too short and cannot be taken for granted. People queued up to purchase term life cover during the lockdown, their average premiums have also become affordable.
  
  However, it must be noted that the average term insurance premiums increase exponentially with age. A recent report by PolicyX.com stated that people aged 55 are paying the highest term insurance premium that is four times than what a 25-year-old would be paying . So, it is advisable to avail a term life insurance early and lock-in the premium price. Undoubtedly, buying term life insurance could be a prudent choice that you would make in 2021, to financially protect your loved ones from the uncertainties of death and disease.


• Health Insurance: Next in line of importance is the health insurance- a type of general insurance to look forward to in 2021. The COVID-19 has provided a push to the health insurance sales. The possibility of hospitalization due to COVID-19, and high medical costs in private hospitals have pushed a greater number of Indians to subscribe for health insurance. As a result, in between Apr-Sep 2020, health insurance has replaced motor insurance as the most valuable type of general insurance in terms of premiums collected - a development of first of its kind.
  
  In 2021, even with the vaccines being rolled out for COVID-19 and vaccination being a long-drawn process, buying a holistic health insurance cover to protect yourself and your family through any medical exigencies is a smart move to make. With the best health insurance plans that cover against COVID hospitalisation, you could now avail a wide array of benefits, like cashless claims at network hospitals, zero sub-limits on room rent, free health check-ups, and so on. Further, you could boost your health insurance portfolio by opting for a critical illness cover to provide financial aid against several life-threatening conditions such as cancer, stroke etc. For extra coverage, you could also opt for suitable top-up plans.


• Credit or Loan Shield Insurance: In 2020, the millennial home loan customers have grown by nearly 10 percent during the pandemic, owing to falling real estate property prices. But if there is a lesson that 2020 has taught, it is that life could be uncertain.
  
  Drawing from this key lesson, a credit or loan shield insurance is an essential type of insurance that could financially protect the home loan borrower and their families from the burden of EMI payment in the event of borrower’s permanent or partial disability or death due to injury or disease. The tenure of credit shield insurance generally covers the loan term and the sum assured equals the loan amount. In case of a mishap suffered by the borrower, the claim amount is entirely paid to the lender, as an assignee of the policy. Thus, opting for a credit shield insurance not only covers the home loan liability but also fulfils the basic need of owning a home, even in the borrower’s absence.


• Personal accident policy: From April 1, 2021, the IRDAI has mandated all the general insurance and health insurance companies to offer a uniform and standard personal accident insurance policy. The standard personal accident insurance policy shall provide a mandatory cover to protect against death, permanent or partial disability caused due to accidents.
  
  Minimum sum insured shall range between Rs. 2.5 lakh and Rs. 1 Crore for considerably low premiums, and the policy shall offer financial coverage to the dependents of the family in case of accidental death, bodily injuries and disabilities. The plan also offers additional rider benefits in the form of accidental hospitalization cover, medical expenses cover, and hospital confinement allowance.

Asset Based Insurance

• Vehicle insurance: The pandemic has urged more and more people to own a personal vehicle due to risk of Coronavirus infection. Post the lockdown, the vehicular traffic has also resumed regular levels across all major towns and cities.
  
  So, if you own a car or two-wheeler, a motor insurance policy could come in handy to kickstart your work in 2021, by protecting you and your vehicle from a range of damages and accidents. Opting for a comprehensive motor insurance policy only provides for third-party claims, but also protect your vehicle from damages such as thefts, fire, natural/man-made disasters. You could also avail the key benefit of cashless claim service at network garages across India.


• Home/Property insurance: 2020 has not just seen the pandemic, but also multiple natural calamities in the form of cyclones, and flash floods. The adverse impact caused by these these natural disasters has increased awareness among people and compelled them to buy home insurance to protect against damages caused by them. So, home insurance that specifically covers ‘Acts of God’ such as natural calamities are the need of the hour in 2021, and both tenants and property owners are entitled to avail it.
  
  Moreover, opting for a comprehensive home insurance policy offers a higher coverage at relatively lower premium rates against unforeseen events such as fire, home burglary, loss of rent, etc.

Conclusion: Thus, both life insurance and general insurance plans are a must, if you want to have peace of mind in 2021. While buying these plans do remember to read the policy document carefully, besides going through the list of inclusions and exclusions with due diligence. Alongside, do remember to zero in on a trusted and reliable financial institution. You can rely on general insurance plans offered by HDB Financial Services through its corporate agent relationships with major insurance companies.