Do Re.1 insurance policies provide adequate protection?

 

K. Aravind

 

Parents are not likely to quarrel with their children if they go to the shop and buy sweets for the remaining Re.1. The value of a rupee is so small. But the situation in the financial markets is a little different. You can even buy an insurance policy for Re.1.

Two years ago, the Indian Railway Catering and Tourism Corporation (IRCTC) introduced an insurance cover for passengers for 49 paise. The policy can be taken only if the traveller is interested. Along with booking tickets, you also get the opportunity to take out insurance coverage. All you have to do is pay 98 paise for policy coverage when booking a ticket for a two-person trip. After taking out the insurance coverage, the customer will be informed about the details of the policy via e-mail. Then there is a link to the nominee’s link to the insurance company’s website.

 

The insurance coverage is for death, permanent illness, or hospitalisation. In case of death, the coverage is up to Rs.10 lakhs. Complete physical disability is also covered up to Rs.10 lakhs. In case of admission to the hospital, the coverage is up to Rs.2 lakhs. Up to Rs 10,000 can be obtained for transporting the mortal remains in case of death.

 

The premium for the life insurance scheme Pradhan Mantri Suraksha Bhima Yojana is a rupee. A premium of Rs. 12 per annum is charged from the bank account. Up to Rs. 2 lakhs: Amount available in case of death of the policyholder. In case of irreversible loss of eyes, legs or hands, up to Rs. 1 lakh will be available.

 

It is sufficient to pay a premium of only one rupee, but this is inadequate for comprehensive insurance coverage. Life insurance coverage of Rs. 2 lakhs is not sufficient as life insurance coverage is required even if it is ten times the annual income of an individual. The Pradhan Mantri Suraksha Bhima Yojana does not replace comprehensive personal accident insurance coverage.

 

The Indian Railway Catering and Tourism Corporation had earlier included the cost of insurance in the ticket. Recently, insurance premiums have been levied on customers.

 

The coverage available in the event of death of a passenger under this scheme is Rs. 2 lakhs, which is inadequate. Life insurance coverage is required for at least ten times the annual income of a policy holder. Therefore, it is advisable to take out a term policy, health insurance policy and personal accident policy on your own. It is more important for us to get the coverage we need than to reduce the premium.