BL Interview. Insurance Talk with Mahesh Balasubramanian, MD, Kotak Mahindra Life 

Outside what my employer offers me on term and health insurance,I have term insurance for myself, for the family I have health insurance basic, health insurance top-up, personal accident and critical illness covers, car insurance for my vehicles, property insurance for my house, cyber insurance to protect my online usage and travel insurance as and when I travel.

In addition to this, I have a non-par savings plan with a reasonable investment, which will give me a tax-free income post my retirement.

My first insurance was a bike cover when I was 21 years. Subsequently, when I turned 30, I took a term insurance plan with critical illness rider and also a ULIP plan for my long-term savings. 

Any life insurance savings product is very value-accretive if you take long-term plans. ULIP, money-back and endowment plans need to be structured to suit your specific requirement to plan for all your life events — from marriage to children’s education to retirement. But the basic rule is, always invest for the long term, say, around 10 years, and you will find that most plans will deliver you decent returns.

Medical costs are on the rise and the Covid pandemic has made everyone realise the value of insurance. For a family of four, I would recommend a basic cover of ₹10 lakh and another super top-up cover of ₹25 lakh. You may also add the critical illness rider and personal accident to ensure that your cover is holistic.

The add-ons useful in health insurance are:

1.     Critical Illness

2.     Personal Accident

3.     Hospital Daily Cash

4.     Ambulance Services

5.     Global Coverage

For my parents I use the employer–group medical cover as I find it quite useful. In addition, I had taken a family floater for them many years back. But premiums tend to be on the higher side as, at their age, insurers charge rates that are in line with their claims experience with that age group.

For appropriate term cover, the thumb rule is minimum 10X (10 times) your annual salary. Depending on age and income levels, you can choose a higher or lower amount.

I evaluate my term insurance cover every five years to check if it is adequate and is it 10X of my annual income range. I have increased the cover subsequently to adjust for the increase in income. 

Once my luggage got misplaced when I was travelling and I was able to claim insurance for the same.

Over the last 20 years, I have had two instances of a claim. Once, the amount of claim I would have got was lower than the NCB amount I was to gain during my renewal. So, I decided to pay for the damage myself and not lodge a claim. In the second instance, the claim value was higher than the NCB benefit and hence I decided to claim.

Currently my house insurance does take care of all the perils and hence I believe I am adequately covered against flash floods or earthquakes, which could be a result of climate change.

Thankfully I make sure I understand all the information before I purchase and hence haven’t had a mis-sold experience. It is better to seek information and go through the illustration and policy documents.