One Mistake That Will Destroy Your Family's Future | Dhruv Rathee

Hello, friends! In one of his speeches, Osho said that we try to hide death in every possible way. That's why we build the crematorium outside the village.

Whereas it should be built right in the heart of the village. So that every time you pass by it, the crematorium would remind you of what would be out last resting place. At a surface level, all of us know that one day all of us would die.

But we don't want to accept the truth. That is why we are afraid of even logical things like insurance. People would tell you to think positively, why would anything happen to us?

But if you happen to open any newspaper, you'd find it full of such news. People die in road accidents, some die in train accidents, some die when bridges collapse. And then there are countless cases that aren't published in newspapers.

Increasing number of people are dying of heart attack. Even young people. None of these people who passed away would have thought that they would die suddenly.

But death crept up on them and they had to leave us. Look at this news from 29th December. In a South Korean city, a Jeju Air airplane deviated from its path on the runway and hit the fence.

Out of the 181 passengers on board, 179 lost their lives. Look at this news from 20th December. An LPG tanker hit a truck on the Jaipur-Ajmer highway.

leading to the spot death of 11 people. None of these incidents could have been predicted. We often read about or hear about such incidents and we disassociate ourselves from them.

Many of us think that such incidents cannot happen to us. But the truth is that it can happen to anyone. There was a man Mahendra, he died in a road accident, it was an emotional heartbreak for his family.

But since Mahendra did not have a term insurance, with his death, his children's dreams also died. His wife's hopes died. His daughter wanted to become a mathematician.

His son was talented enough to be an architect. But forget about their dreams, managing day-to-day life became difficult. His wife gave up wanting new clothes.

His son had to grow up at a young age. He had to give up school trips and the like. His daughter gave up her post-graduation education.

And joined the first job she got, so that her brother could continue studying. The sorrow of losing their father would ease with time. But this financial helplessness will become a lifelong burden on them.

This is not a filmy story, friends. This is the reality of many families today. Only at such drastic times do people realise how important it is to have insurance.

In its Annual Report the Insurance Regulatory and Development Authority of India (IRDAI) stated that insurance penetration has been decreasing for the past two years. In the financial year 2024, the ratio of annual premiums and GDP in came down to 3. 7%.

Less than 5% of the population in our country has life insurance. Many people are lucky enough to survive such accidents, but they do get injured. In such cases, health insurance can help them.

Without a health insurance, the family has to spend a lot of money on the treatment. They do survive eventually, but the financial pressure on their family, it would get difficult to see the helplessness of the family. All this helplessness is only because some people are stupid enough to assume that being positive would shield them from all mishaps.

So they don't care to think about insurance. But this is exactly why we need to talk about this. Friends, in this video, I would like to explain everything related to insurance.

The right way to buy an insurance policy. How can you buy those? The mistakes that you need to avoid while buying a policy.

And if you already have insurance, how can you check whether you have taken the right insurance? Let's understand these concepts properly in this video. The basic concept of insurance is quite simple.

A large number of people pool their money at one place, in a central pool so that if there's a mishap with any one of them, they can get monetary relief from the central pool. This is called Risk Sharing. Anyone can be a victim of a bad incident.

The risk is low, but if it happens to you, then you might have to bear heavy losses. That's why everyone contributes a small amount, to eliminate the chances of suffering a loss. Not every person will suffer a mishap, that's why this concept works.

Insurance companies work as intermediaries. People deposit money in this central pool through insurance companies and the companies maintain this central pool. If you buy insurance, you have to pay a set amount every month into the central pool.

The monthly amount that you need to pay is called a Monthly Premium. But premiums aren't necessarily monthly. They can be quarterly, yearly or as a single payment.

But most commonly they are monthly. The concept of insurance is thousands of years old. We can see its evidence even in 100 BC.

When Roman military leader Gaius Marius had his soldiers form 'Burial Clubs. ' If a soldier died in a battle, the other members of the club paid for his burial. And so every soldier contributed money to the burial club.

Even before this, in 1750 BC, Babylon was ruled by King Hammurabi. An archaeologist discovered a law of his reign which talked about Maritime Insurance. The merchants who took loans for their ships paid extra money to the lenders.

In return, they were guaranteed that if their ship sank or was stolen, they wouldn't be asked to repay the loan. Back to the modern times, in 1666, a bakery in London caught fire. The fire spread unimaginably with the wind.

In total, 13,200 houses were burnt. Including major buildings like St. Paul's Cathedral and the Royal Exchange.

It was only after this that an organised fire brigade was established in England and fire insurance companies were founded. In 1667, Nicholas Barbon set up a fire insurance company. By 1680 it had grown into a joint stock company called the Fire Office.

And a few years later, in 1676, Hamburger Feuerkasse was established, considered to be the oldest insurance company in the world. It was established in Hamburg, Germany and is still operating. Today, the concept of insurance is seen in almost every industry.

When Tom Cruise films his Mission Impossible movies, they need to get insurance before anyone performs dangerous stunts. "There's a lot going into this stunt. " "So Tom put together this master-plan, it took all these experts in each of the particular disciplines involved, to make this whole thing happen.

" "Tom in the air, jumping out of a helicopter. " In case he gets hurt or dies while performing these stunts, the insurance company will pay the film production company to compensate for the loss. The insurance budget of the latest Mission Impossible film is $3 million.

But you don't need to worry about all these types of insurances. The kinds of insurances that matter for average people like us, are the term insurances, that is, a Life Insurance and a Health Insurance. So the very first question should be, who needs to take insurance?

You don't need to take life insurance if you don't have any dependents. For example, if you are 70 years old, your parents have passed away, and you hadn't married. When you pass away, there won't be a financial disaster in anyone's life.

In such cases, you can ignore term insurances. Second case, are you a billionaire? Have you earned enough money for the next 7 generations to live comfortably?

If yes, then Mr and Ms Billionaire, you don't particularly need any term insurance. And the third case is if you are a non-biological person, you think that you won't ever fall sick, then you can skip health insurance. But for the rest of us, who don't satisfy these three conditions, if you're younger than 70 years, aren't filthy rich, then it would be wise to include term insurance and health insurance among the fundamental needs of life.

If you have food, clothing, shelter, electricity, water, transportation, as well as insurance policies, you still need to watch this video carefully because I'll talk about two issues. First, whether you have insurance or not. And second, whether your insurance covers a suitable amount or not.

Now, there are multiple types of life insurances. There is a type of insurance where you get back 100% of your investment. The monthly premiums that you pay during the tenure of the policy, after the set tenure, you will get your money back.

This is called Zero Cost Insurance. Some sell it as a policy with 100% Refund. There is another type of insurance which lasts for a particular term.

You can decide on a term of anywhere from 10 to 30 years, and if you live through this term, if you survive, you won't get any money. This is known as Term Insurance. Many people use the terms Term Insurance and Life Insurance interchangeably.

But in reality, Term Insurance is a sub-section of Life Insurance. As I told you, you buy the insurance only for a specific period. This period can be 10 years, 20 years or 30 years; it's up to you.

and if you die during that period, only then will your family get the insurance payout. If you survive that period, you won't get anything, and the insurance cover will be withdrawn. It sounds weird, but it is the best insurance because it is the cheapest.

it's affordable for most people. And it fits very well in most people's life situations. For example, this is a website it lists the various insurance partners and details of their term plans.

In this insurance, you'll get a life cover of ₹20 million. And the policy term is 12 years. That is, if you 40 years old today, 12 years later you'd be 52 years old, you might expect to earn more than enough to support your children's dreams of getting a commercial pilot's license or starting a business or going to IIM.

You know that you'll be able to afford those with your salary over these years, as long as you don't die in these 12 years. Because then everything will go wrong. That's why you might need a term insurance only for these 12 years.

If you die in these 12 years, your family will get ₹20 million so that they can continue as planned. So, let's look at the term insurance plans for this situation. This is the first insurance provider.

It is asking for ₹699. The basic terms are the ones I set. A life cover of ₹20 million, for a policy term of 12 years.

Obviously, the detailed terms and conditions will be different. But I can set the basic terms. Moving on, the second insurance provider is asking for ₹940 per month.

The third insurance provider is asking for ₹994 per month. And the fourth is asking for ₹1,257 per month. What's the difference then?

These are being offered by different companies. And the maximum limit changes too. Some may have a limit of 85 years, some can continue up to 99 years.

Apart from this, the percentage of claims settled is also different. We'll discuss this later. I would also like to mention that if you aren't married, you should still take a term insurance early in your life.

Because the younger you are, the cheaper it is. With age, the premiums keep increasing. If you take insurance now, you can lock the premiums you'd need to pay.

The amount of premium will be fixed throughout the tenure. This gives you an advantage from the perspective of inflation. Apart from this, another benefit is the tax deduction.

Under Section 80C, any insurance premium you pay is eligible for a tax deduction. Also, it's basic common sense that the longer the tenure of this insurance is, the more premium will you need to pay. You need decide your policy term based on your age.

For example, I am 30 years old. I think a term cover till I'm 50 years would be enough. So, my policy term should be 20 years.

Apart from this, obviously, based on the size of your insurance cover, your premium will change accordingly. If you want a higher life cover, if you want your family to get ₹30 million instead of ₹20 million, you will need to pay a higher premium. So we come to the question, how much should your life cover be?

₹10 million? ₹20 million? ₹30 million?

₹50 million? Or even more than that? This can be determined by a simple calculation.

You need to ensure that your family's current lifestyle can be maintained. Here you would be concerned about inflation too. If your family spends ₹50,000 rupees in a month now, a few years later, with inflation, their expense would increase too.

True, it will increase. This becomes a complex calculation. So, there's a rule of thumb.

Consider your current annual salary your life cover should be at least 10 times that. This means if you earn ₹1. 5 million a year, then your life cover should be at least ₹15 million.

You might have some family goals too. Your children's college education, college fees are getting expensive each year. Or any other expenses you expect.

In such cases, you need to raise your insurance cover. It can be 20 times your current annual income. You can take a life cover for ₹30 million on a yearly salary of ₹1.

5 million. And you don't necessarily have to buy insurance from the same company. If you want to buy a life cover of ₹30 million, you can buy 2 policies of ₹15 million each.

But remember that the terms and conditions of some companies state that, if you already have a life insurance, you will need to inform them beforehand. Keep these in mind. If you go to any policy aggregator's website, the companies which list the various insurances provided by different companies, this is how the website's interface will look.

Here you can select the life cover, policy terms, you can select the payment type, how long you'll need to pay, payment frequency, whether you want to pay monthly, quarterly or yearly, paying monthly is the easiest. You also get some extra options in the form of Riders, like Critical Illness Benefit. That is, if you have a fatal disease, like kidney failure or heart attack, the treatment for such diseases can be quite costly.

If you want your insurance provider to give you an additional coverage to bear the expenses for the treatment, then you need to check this option. Then there is an Accidental Death Benefit. If you die in an accident, your nominee will get an additional amount on top of the insurance cover you opt for.

And similarly, there is an Accidental Disability Benefit. Obviously, if you choose these riders, it raises the premiums too. Finally, there's the last option.

where in your absence, your family will get the payout in either an all-in-one-go or they will get monthly instalments. According to me, it is better to get the payout all at once. After selecting these, you will see the various insurance plans provided by these companies.

And here, one of the most important things that is being highlighted is the Claim Settlement Ratio. This ratio shows how many claims out of the total claims received by the company does it settle. In how many cases has the company paid the settlement amount to the family when the insurance holder passed away?

The government regulatory agency IRDAI releases the Claim Settlement Ratios of the insurance companies. The higher the ratio of the insurer, shows a better track record. In a way, you might trust that company more than the others.

But in our case, it doesn't make much difference. It's all about 99 point something percent. For this specific life cover and this specific policy term, the monthly premiums that you'll pay, would be around ₹1,000 to ₹1,500.

Just think about it. By paying only ₹50 to ₹60 daily, you would be insured for the next 40 years. Your life would be tension-free.

Actually, this is the basic purpose of insurance to give you a sense of security. Broadly speaking, these were the most important aspects of a term insurance. If you still have any questions, if you are searching for a plan and can't choose one, or for any other difficulties, then I would recommend that you use the link given in the description box, to go to Policy Bazaar.

Policy Bazaar is an aggregator website. On it, you can search for the various plans offered by different insurers. Click on the link and fill in your name, date of birth, gender, and phone number.

And a certified expert from Policy Bazaar will call you and will help you choose the right insurance plan for you. They will help you with everything till you get insured. And not only that, but if something unfortunate happens to you, if you die, then Policy Bazaar's dedicated claim assistance will help your family claim the life cover.

You will get a quick and hassle-free settlement with their help. Since April 2022, they have helped settle claims worth more than ₹3. 70 billion.

To avoid any problems during claim settlement, I would like to tell you two more important things. First, inform your family about the policies. They should know about the insurance policies you buy and what they'd need to do if something unfortunate happened to you.

Keep your insurance documents safely in a file. In case you suffer any illnesses later on, keep adding your medical history to that file so that every document can be found in one place. Second, if you have any illnesses, report them honestly.

Any lifestyle choices like drinking or smoking, shouldn't be hidden. In fact, you can tell your insurance provider to get your medical check-up done. Because if you lie and hide something, later on, it can pose a problem during claim settlement.

Now, the other part of this story is Health Insurance. There's a man who works responsibly. Single-handedly, he takes care of his children's education, his sister's college fees, and his parents' medical expenses.

But one day, he meets with an accident and in the hospital, he finds out that the medical expenses will be ₹1 million. Term insurance will help your family when you die. But if you are unable to work for a significant time after an accident, or your treatment is expensive, it can be problematic.

In such cases, you'll need a Health Insurance. In our story, this man is confident that his company provided a health insurance. When he goes to show it to the hospital he finds out something shocking.

His company's Health Insurance covers only ₹300,000. He's need to pay the remaining ₹700,000 on his own. If this happens to a poor family, it would be disastrous.

That's why the Health Insurance should be such that it covers your medical expenses. Many people think that the health insurance provided by their company is enough, but often, it isn't. Often, the health insurance provided by a company has a limit.

They won't bear expenses beyond a certain level. Apart from this, after leaving the company, all your benefits are gone. On top of that, there are many treatments that are not covered.

One might face a health emergency at any age. Even an infant might need to go to the hospital as does an adult. Treatment isn't less expensive for any age group.

But one thing is for sure, similar to a term insurance, even in health insurance If you buy insurance at a younger age, your premium would be lower. So, the younger you are while getting the health insurance plan, the better it will be for you. Apart from this, you need to check the Claim Settlement Ratio when getting health insurance.

Just like for term insurance. This is very important. And while reading the terms and conditions, you need to pay attention to 20 points.

You need to consider so many points, but I want you to get complete information from this video. So, this is the checklist with the 20 points that will help you in choosing the right health insurance for you. First, the amount of health insurance you'd get.

That is, what will be the maximum amount you can get? Second, whether it offers automatic restoration or not? Suppose your insurance coverage is ₹1 million, and you get sick once and use up ₹400,000, now, in future, will you be covered for only ₹600,000?

Or will there be an automatic restoration and you will continue to be covered for ₹1 million? Third, check the waiting period. How many days after taking the health insurance, can you avail the health insurance benefits and which ones?

Obviously, the lower it is, the better. Fourth, does the insurance policy mention any co-payment clause? It means that some percentage of the expenses would be borne by the policyholder, you.

Whatever the expense be, you will always need to pay the specified percentage. If this clause isn't mentioned, you won't have to pay. But it is mentioned, pay attention to this co-payment percentage.

Fifth, the health insurance cover is one of the limits. Additionally, there are sub-limits. Check for any room rent capping.

The rates and the hospital rooms covered by the plan. This depends on your preference, but you should be clear about this beforehand. Sixth, check which ICU rooms are allowed in it.

There are different types of ICUs. A standard ICU, a Neonatal Intensive Care Unit, a Corony Care Unit, a Surgical Intensive Care Unit. These serve different purposes.

So you need to check which ICU rooms would be covered by the plan. These specialized ICUs, think about whether you might need those someday or not. Seventh, would your health insurance be cashless or would you need to apply for reimbursement later?

Eighth, look for the network hospitals of the insurance company. The hospitals where you can seek treatment. Ninth, does the health insurance exclude any treatments?

Are modern treatments like stem cell therapy allowed or not? Tenth, does it offer any Critical Illness Riders? Which critical illnesses have been covered?

Obviously, you'd have to pay a higher premium to get such riders. Eleventh, check maternity benefits similarly. The outpatient expenses related to pregnancy, are they covered or not?

Twelfth, the expenses incurred before any treatment or being admitted to the hospital, consultation charges, medical tests, would those be covered or not? Thirteenth, there may be some expenses after being discharged. Such as follow-up visits, would they be covered or not?

Fourteenth, daycare procedures which don't require you to be admitted, are they included in health insurance or not? Fifteenth, if you want to get a preventative medical check-up would that be allowed or not? If yes, then how many?

It means that you aren't sick but you want to get a medical checkup as a form of prevention. Sixteenth, how long would your health insurance coverage last? Seventeenth, can you get it renewed after its tenure ends or not?

Eighteenth, if you don't get sick for an entire year, if you don't claim health insurance even once, will you get a no-claim bonus or not? These bonuses are offered by some companies if you don't use the health insurance for an entire year. Nineteenth, is it an individual health insurance for only you or can you opt for a family plan?

If you have the option to get a family plan you should go for it, because most of the time it's cheaper as compared to taking individual plans for every member of the family. And finally, the last question. What is the reputation of the insurance provider?

How big is the company? What are the reviews of the company? And what is their claim settlement ratio?

These checkpoints may seem overwhelming to you. So to make it easier for you, I have compiled these points in a PDF document. And have linked it in the description below.

You can print this document, and whenever you are planning to get health insurance, go through the checklist point-by-point, to evaluate each plan. Apart from this, there's a link to Policy Bazaar's health insurance platform in the description. You can fill in your details on it.

and talk to an insurance advisor, to get some qualified suggestions. And lastly, don't ignore health insurance just because you are healthy. If you are healthy and fit, this is the best time to get a health insurance.

Because this is when you will get the cheapest health insurance. I hope this was an informative video for you. I thank Policy Bazaar for sponsoring this video.

If you want to see more videos like this, let me know in the comments below the topics on which you'd like to watch a comprehensive and detailed explanation. And I'll see you in the next video. Thank you very much!