Life Insurance - The policies that you can buy for ₹1

What can you buy for Rs1? Well, financial products such as personal accidental cover, life insurance and gold can cost as low as 1. Sounds too good to be true? Here we take a look at these products and tells you if it is worth it:

Low cost

Last year, app-based taxis company Ola started providing insurance cover for 1. “The premium is priced at 1 to make it affordable. It is to hedge risks associated with travelling on the road," said a spokesperson from an Ola Cabs.

To buy the insurance, you have to pay 1 every time you take a cab ride. The in-trip insurance cover, in partnership with Acko General Insurance Ltd, within the city includes 5 lakh personal accident cover, Rs1 lakh hospitalisation benefit and loss of baggage. For outstation rise, the insurance cover includes emergency hotel stay and home insurance cover as well. To file for claims, the customer must first select the ride that they wish to claim the insurance amount for. “This feature is available in the ‘Support’ section," the Ola spokesperson added.

The policy is compulsory for children less than five years of age, and covers death, permanent total disability, permanent partial disability and hospitalisation. The maximum cover is up to 10 lakh, in which you get a cover of Rs10 lakh for death and permanent total disability, 7.5 lakh for permanent partial disability, 2 lakh for hospitalisation expenses for injury and10,000 for the transportation of mortal remains.

Should you opt for it?

To begin with, 1 is a minuscule amount to spend for an insurance cover. But should you consider it? An insurance cover that costs 1 can’t replace your comprehensive insurance cover.

In case of the IRCTC cover, did you know earlier the cost was included in the ticket and only recently passed on the cost to customers?

“The railway ministry is not essentially offering anything extra. Earlier such covers were in-built, but now you are being charged 49 paise. Though the amount is negligible, the burden has been transferred to the traveller," said Pawan Agrawal, founder, Invest Guru.

When it comes to life insurances, 2 lakh is inadequate. “Generally a term cover is advised to be 10 to 20 times your annual income based on your requirement," said Prabhudesai.

Source : Live Mint back