Insurance as a whole is a wide subject as there are several types of insurance coverage policies that guard you against any mishap or incidence that may occur in the future. Finding the one that makes the most sense and gives appropriate coverage, might get confusing at times. Some of the most widely used insurance policy could be clubbed in to two main categories.
– Life Insurance
– General Insurance
As mentioned earlier, the subject of insurance is of immense proportions, let’s discuss each of the category separately for better understanding;
Life insurance has been the subject of much debate for the past many decades around the world. It came into the limelight in Pakistan in the past several years with people having different views on the subject. Some do not believe in planning the future and they happen to enjoy life as it flows. Others, are not conscientious and want to secure the future for their families in any eventuality. The importance of life insurance in our part of the world is far greater than most other countries in the world as considering the risk factors we have at stake and one’s life not being fully secure.
Many believe God has taken upon Himself to take care of mankind. In the same breath, one must not also forget that it is said that “Have faith in God, but tie your camel first”. Therefore, a good life insurance policy with a reputable company is that rope with which you tie your camel.
Having said this, let’s evaluate point by point as to why everyone should have a decent life insurance policy:
- The political and law and order situation in our geographical area is pretty volatile. Bomb blasts, street crimes and target killing is the norm in a lot of cities here in Pakistan. Many young people die without any cause. Similarly, though the life expectancy is on the rise, so are the causes of dying young. Heart failures, cancer, HIV and unhealthy lifestyle. In such a situation, if a sole earner dies the family is devastated. Life insurance in such a case can make sure that the family is taken care of on the financial front. Children can keep going to school, bills are paid on time, the kitchen is running and life still goes on
- A person who has a secured life insurance is in peace in both ways; when he lives long enough, this saving will help in retirement plans, vacations or perhaps, in some cases, weddings. This money will also come handy if one intends to build or buy a house.
- Usually good insurance companies offer many insurance plans. This also includes cash back or loan facility up to certain amount of the payments made. Supposedly, if a person has kept paying the insurance premium for 10 years on a life insurance of 20, 25 or 30 years, and suddenly cash need arises; daughter’s wedding, buying of property or wishing to go for Hajj, the person can apply for a cash back. This amount will be however deducted at the time of final payment when the policy matures.
Now that we have discussed numerous benefits of a life insurance, let’s also consider what can go wrong if you have not invested in life insurance policy:
- A person retires with no substantial savings. The person would be dependent on the amount of severance or retirement that the office has offered in terms of gratuity or provident fund.
- In case of death of the policy holder, if the savings are not substantial, the family would be dependent on others to meet expenses, especially if there is no pension plan in place.
This insurance covers all kinds of mishaps, incidents and accidents occurring in our daily lives. These may include engineering policies which covers buildings, homes and offices, travel insurance which safeguards your travel requirements, auto insurance which covers your needs for your vehicle and finally miscellaneous policies that cover random mishaps for instance, cash mishandling, stolen phone, misplaced credit cards, and more.
A comprehensive insurance covers the structure, in short, whatever is kept inside the property. This is the most common insurance cover purchased because the stakes are too high and can go up to a billion rupees both in terms of the structure, machinery, finished stock and raw material. This type of policy usually covers a period of one year. In broader perspective, insurance of such properties offer coverage against:
- Theft & burglary
- Strike and Riots
- Malicious damage
There are basically two types of auto insurances; comprehensive insurance and third party insurance. The term “Comprehensive” clearly means it covers all sort of damages and risks that a car or any commercial vehicle may confront while on the road. Comprehensive Insurance therefore covers:
- Motor collision with any other vehicle or government or private property
- Fire and explosion due to mechanical or electrical fault
- Natural calamity including earth quake, flood or lightening
- Theft and or car snatching on gun point
- Damage due to riot, strike or terrorism
- Meeting an accident even when car is parked and the car is not driven
Third Party Insurance is legally mandatory. The intending insurer must be clear that this DOES NOT cover the loss or damage of the insurer or his vehicle. This insurance protects the damages and losses of other person with whom you may have collided with, or is considered to be your negligence. For an example, if you bump into another car or any other property the Third-Party insurance will cover the cost of repair.
Travelling has increased many folds in the last decade so have the risks involved. Although travel insurance covers many aspects but the most important are health and loss of baggage that usually happens with transit flights. Some of the key subjects travel insurance covers are:
- Health / Medical
- Lost or stolen baggage
- Baggage delays
- Cash emergency
- Flight delays due to bad weather
- Hijacking or terrorism
Optional travel insurance plan can also include concierge service, travel assistance in emergency. EFU General Insurance offer unique travel insurance service for students going abroad. Medical care is available in case of any sickness while the student is temporarily living abroad.
Insurance therefore by all means is smart way of protecting the ones you love and care for. In Pakistan leading insurance companies have started offering insurance policies that are Shariat compliant for people who have inclination towards Islamic financing. If you are not insured yet, today is the day when you should start investigating various products available.