Personal accident, critical illness and general insurance — when each earns its premium.
Beyond term life and health, a few other covers can earn their premium in the right circumstances. The skill is knowing which you actually need — buying every cover is wasteful, but missing a relevant one leaves a real gapA jump between one bar’s close and the next bar’s open..
The guiding principle for all insurance:
insure against what you cannot afford to absorb yourself, and skip the rest. Insurance is for
catastrophic, low-probability losses that would devastate your finances — not for small, predictable costs (which you self-insure via savings). Apply this filter to the “other” covers:
Personal accident cover (disability/death from accidents) is cheap and valuable for earners — disability can end your income while
raising costs, a
gapA jump between one bar’s close and the next bar’s open. term life (death-only) doesn’t fill.
Critical illness cover pays a lump sum on diagnosis of major illnesses (cancer, heart attack), useful for income replacement and non-hospital costs
health insuranceCover that pays your medical and hospital bills. misses — worth considering, especially with family history.
General insurance (home, motor — motor third-party is legally mandatory) protects valuable assets you couldn’t cheaply replace. But
avoid the gimmicky micro-covers (phone insurance, tiny extended warranties) — those are small losses you can self-absorb, and they’re usually overpriced. Match each cover to a
genuine catastrophic risk in your life; ignore insurance marketed for trivial or improbable scenarios.
- Personal accident — cheap, valuable for earners: covers disability (which ends income and raises costs) that term life doesn’t.
- Critical illness — lump sum on major-illness diagnosis; helps income replacement and non-hospital costs; consider with family history.
- General insurance — home and motor (third-party legally required) to protect assets you couldn’t cheaply replace.
- The filter — insure catastrophic losses you can’t absorb; skip gimmicky micro-covers (phone, tiny warranties) you can self-insure.
ExampleA self-employed earner adds a cheap personal-accident + disability cover. A serious accident leaves him unable to work for a year — his term life (death-only) wouldn’t have paid, but the disability cover replaces lost income exactly when he needs it. Meanwhile he skips the ₹2,000 phone-screen insurance — a small loss he can easily absorb himself. Each decision matched cover to catastrophe, not convenience.
Key takeawayBeyond term + health, consider personal accident (disability cover term life misses), critical illness (lump sum on major diagnosis), and general insurance (home/motor for big assets). The filter for all insurance: cover catastrophic losses you can’t absorb yourself; skip gimmicky micro-covers for small, self-insurable losses.