Why insurance / risk planning is important? Now a day’s everything is uncertain, nobody can see the future. If any unfortunate event will happen to you, the family will suffer both emotionally and financially. One solution is that you should take adequate life insurance so that the family will be able to meet the same standard of living as before and meet all the financial goals like children’s education, marriage, liquidation of all the liabilities. Similarly health insurance is very important because medicine cost and medical expenses are increasing drastically day by day. Even personal accident is the most important because if there is disability, not only the medical cost has to be met but also the bread earner has the burden of running the family. What type of insurance you should buy? Personal accident policy It’s most important yet most neglected risk cover. Everyone should have personal accident cover as nowadays life uncertainty is high.Rise in road, train accidents, frequent travelling due to job profile poses a real threat to everybody. Life insurance covers the risk of death; health insurance covers the risk of sickness; where as personal accident insurance covers the risk associated with accidents. If the life assured is seriously injured in an accident and disabled either temporarily or permanently, he/she will not able to work and earn. So you should take adequate personal accident insurance. Health insurance Everybody should take adequate health insurance, whether he/she is earning or not. Like inflation, hospitalization expenses and medicine cost can eat your entire corpus which you have saved for future purpose. Since in India, we do not have government sponsored Health Services System for all, getting a sufficient health insurance cover for self and family is of utmost importance. Life insurance when taking life insurance cover, the insurance and investment should not be mixed together. If you are an earning member of your family and your family is dependent on you, you should take adequate life insurance cover which will be helpful to your family, in the event of any unfortunate event. The amount of cover should be adequate and amount should be arrived at after a proper need analysis. Term insurance are advisable if you want to cover the risk only and not with it with investment. How much insurance you should Buy? In life insurance, there are two methods available for calculating insurance cover. One is income replacement method (Human life value) and expenses replacement method (need based approach). Insurance cover amount will be different from one person to another person. In Human life value (HLV), insurance amount is the discounted value of all future income whereas in expenses replacement method, insurance amount is the discounted value of future expenses and the financial goals less current assets. A fee only certified financial planner can help you in calculating insurance cover as they are independent of product sales. How to select the best insurance company? Before buying any insurance product, you should compare the features, riders, exclusions and the price. You should also study the claim settlement ratio of the company with the help of your planner or advisor. How to buy online insurance? Now online insurance is available. You can buy term insurance through online which is cheaper than buying policies through the agents. But one must go through the features of the policy before buying term insurance since the features of online insurance are sometimes different than normal policies brought agents or brokers. What will you do if the features of the policy bought are different than what have been told to you? There is free look cancellation period of 15 days in which you can surrender the policy if the features of the policy are different than what has been told to you. A thorough risk profiling done by a Certified Financial Planner or SEBI registered investment adviser for your insurance planning will help you to manage your risk properly.