Good and Bad insurance plans

I have been thinking about what my next post should be? You might ask why, when my last post Must have insurance plans - # 2 mentioned an article about life insurance. Well, the reason is a comment that I got for the post - Must have insurance plans - # 1. Sriram asked me to provide details about good health insurance policies.

The issue is the word good. I have always thought of English as an interesting language – simply because several English words are relative in nature. – the word interesting included. Good and Bad are certainly relative words especially when you think of buying something from the market. Take a TV for example; there are sets available with the very basic features to using it as a computer and of course at varying price points. How much good in this case, as well as in most cases of making “BUY” decisions, is a function of what you really need (and will use) and what you can afford. And you would appreciate that it is so difficult for me, who hardly know your requirements, to help you make an absolute decision.

Now you know why I have been thinking. There is one more reason – a far more important one - from my perspective. Purely as a matter of principle, I had decided that I would never recommend a particular policy from a specific company. It is not my intention to be a marketing agent for insurance companies. On the other hand, I certainly want to help you understand insurance plans and help you make good decisions. Kind of contradictory ah? - Now you understand my dilemma!!

What I finally decided is to provide details about what you should look for in good insurance plans and what benefits that would give you. Hopefully, that should help you decide on what you really need and let you zero in on the right one to buy. I might still analyze some plans available in the market and provide you the “good’” and the “bad” – but I am not going to make a decision for you. You must be the one to take decisions related to your life – and be responsible and accountable for your decisions – another matter of principle and personal belief.

Now that we have resolved my dilemma, at least from  my perspective, you need to understand that insurance in its strictest form is not an investment vehicle. It is a generally accepted principle that insurance is a mechanism that could help you face uncertainties of life – death, accidents and health problems all included. Insurance is all about helping you face unpleasant possibilities.

So my dear reader, the first thing that you need to do is think about potential unpleasant possibilities and how you can be prepared by buying insurance. Now, you must also determine which unpleasnt possibilities you really need to have covered. There has to be a REAL NEED for you to cover for an uncertainly or risk by buying an insurance plan. Time for you to put on your thinking cap and think about  risks you foresee and what you have done so far to help mitigate some of them. Meanwhile, I will draft a few more posts with some examples to help you with your decision process. Remember that I expect you to make the final decision, so please do think hard about why you need a particular risk to be covered.