Are you underinsured…? You may be the greater loss

Are you underinsured

Are you underinsured ?

Do you want to buy just to save on tax…?

This is what we do usually.

It is probably one of the biggest mistake people do when buying insurance. They consider it only as a tax saving tool and that’s it.

They don’t see anything else.

According to

“People in India go on a buying spree in the months of January, February and March to save tax.”

Since the demand for insurance products usually rises in these months, even companies take advantage of it. They become pushy for products and services which are complete misfits to once needs and financial goals. And you fall in the trap that makes you lose big time.

Though you end up saving tax but you deviate from the ultimate goal and i.e. to protect your family financially.

What you just said...?


Insurance can be your greatest help when in need. They not only help you secure your assets but also minimize the debt burden.


Make sure you have it enough.

Being underinsured is a curse, as you may not get what you ultimately want.

What’s the use of buying a plan when it can’t get you full protection…?

Adequate insurance cover ensures that your family’s financial obligations will always be met and growth won’t be hindered.

Since insurance directly helps the family even after the death of the insured, you would always want to have it adequate.

How to know if you are underinsured…?

Please tell me

Choosing a policy is tough but choosing the right cover is even more difficult. You may not know what you want and what lies ahead.


Think not twice but thrice before finalizing on insurance cover.

Though, if you are just starting out then you can always ask for the experts help but what for those how have already bought the plan.

Will there be any way to find if they are underinsured…?

Yes, there is…

Just consider these below given points and you will get the facts right.

Check for the Exclusions:

What is excluded...?

Though you may be satisfied with what is included in your insurance policy but what about exclusions.

Ever thought of giving a look to it…?

Every policy maintains a list of inclusions and exclusions for you to consider. Things excluded are generally not covered in the plan.


If unknowingly you file for a claim against a reason that was part of the policy exclusion then you will be simply rejected.

Consider this…

Here is the list of health insurance policy exclusions from Bharti-AXA.

What is excluded from your policy

Now if a certain person “Mr. X” who is insured with Bharti-AXA files for a claim, if he recently were operated for Hernia. Then he will be rejected at face as this is part of the policy exclusions.

Though this was a simple e.g. to let you see your exclusions but at times there are elements that you would want to be covered for but are part of the exclusions. If this is the case with you then consider yourself underinsured as you won’t get the claim for it.

Estimate your living cost:

What is your cost of living...?

If you want to feed your family always, then either maintain a good stock or have enough insurance coverage.

It is generally said that your day to day expenses plays an important role in determining your standard of living. Whatever it is, you would always want to make sure that it always climbs the ladder.


Things are never always the way you want; a lot depends on execution as well. Thus make sure you estimate the cost of your families living so that you can insure it for years to come.

Determining your life style in figures is not tuff. Just follow this simple chart and you will get your figures in minutes.

Find What you pay for towards your…

RentCost per month
ElectricityRs. --
GASRs. --
WaterRs. --
FoodRs. --
TravelRs. --
Books and Material suppliesRs. --
ClothesRs. --
MedicalRs. --
Mobile BillsRs. --
Internet Rs. --
LaundryRs. --
Gym Rs. --
Childcare, etcRs. --
Total value of your life

Whatever the total is, just divide that by your life cover and you will get the no. of years for which your insurance will support your family.


Your lifestyle total came out to be: Rs.2.5 lac per month and

If your life cover is: Rs.10 crore.

Then the no. of years for which your insurance claim will support your family would be:

= (Value of your life style X 12 months) / Life cover

= (Rs.2.5lac X 12 months) / Rs.10 crore.

= 3 years.

Is your life cover 20 X your annual salary…?

Is your policy cover 20 times your annual income

If this is not so, then you will surely be underinsured.

As per Morning star your insurance policy should be atleast 15 to 20 times of your yearly income.

Though, this may not be ideal for everyone but if you maintain such a policy then you can sure to give a comfortable life to your family.

Since the whole idea of getting insurance is to support your family, thus make sure you give them enough.

Your insurance will support not only your dependents but will also take care of your:

  • Debt or loan taken in your lifetime,
  • Assets maintained,
  • Education of your children,
  • Medical expenses and will even provide
  • Income replacement to your family.

Enquire Competitors:

Enquire your competitors

Though this may not be the most accurate way to find if you are underinsured or not but can come as a great help.

Enquire other insurance companies for their premium quotes to know how cheap or expensive they are. If there quotes are inexpensive then yours than you might be paying a lot extra for the same plan.

You may also want to consider what their policy inclusions and exclusions are. If they cover the element that you most need and is excluded in your plan, then you are certainly underinsured. This is because you will have to pay, out of your own pocket of what is already covered in their claim.

Under-insurance is a big problem that needs to be dealt by buying more. Don’t play with it just to save on tax.

“Insurance is for your family, buy it enough to give them a respectable living.”