INSURANCE - A LONG-TERM INVESTMENT

DR.S.M.ALAM
Dec 14 - 20, 2009

Insurance is directly related with monetary affairs of people. Insurance policy actually solves the monetary problems. Through insurance policy a person is registered with insurance company for indemnifying risks on his life, property, health, car, motor cycle, air travel, etc.

Life insurance is a basic need of family to provide relief at the death of an earning person. The term life insurance is affordable and an effective protection available. Life insurance is arguably the best investment in today's financial arena.

It brings peace of mind at an affordable price. It is important to protect ourselves and our beloved ones against financial crisis in life. A large number of people in our country are out life insurance cover as they do not realize that just for pennies a day they can protect their family with the term life insurance.

Insurance policy allows a person who suffers a loss or accident to be compensated for the effects of misfortune. Insurance policy is a way of providing legacy, a plan under which regular payments are made to a company during lifetime and in return the company pays specific sum to the person or person' nominees.

Insured events that may be covered include: death, diagnosis of terminal illness, diagnosis of critical illness, disability due to ill health, permanent disability, accidental death. Life insurance provides affordable protection for a predefined period of time so it is often used to serve temporary protection needs.

Each insurance policy has its own value for the insurers. One must think about the importance of insurance policy, because it provides safety to a person at the time of loss or theft. Many people around us have future dreams and planning. It is quite natural for a human being to worry about those whom he loves. Especially the people who are in charge of their families have their minds running for the care, safety, and health of their dependents.

In Pakistan, the periods from 1950 to 1960 was commanded by private life insurers, who were engaged in marketing and selling their life insurance plans and policies in the country. Pakistan insurance sector nationalized in 1972 and a State Life Insurance Corporation was established by merging all the insurance companies, with a view to run insurance business on sound foot, provide more efficient service to the policyholders, maximize the return to the policyholders by economizing on expenses, and increasing the yield on investment, make life insurance a more effective means by mobilizing national savings, widen the areas of operation of life insurance and make it available to as large a section of the population as possible, extending it from comparatively more effluent sections of the society to the common man in towns and villages, and use the policyholders fund in the wider interest of the community.

At present, there are nearly 50 insurance companies in the country, and they are providing all benefits to the policyholders, who are engaged in government and private company. Such benefits are group life insurance for the employee, group provident fund, group house finance insurance, group life insurance policy for all agri-business, group insurance policy for consumer finance, for health, and group accidental policy for the fishermen.

Life insurance and health insurance policies are the two most important segments of the insurance policy. Other policies are also equally important. All insurance policies provide immediate financial help to the policyholder at the time of accident or loss of life of an insured person.

A health insurance plan covers hospitalization in the event of illness or an accident. The insured patient can also get room rent and the fees being paid for the laboratory tests and other treatments which are allowed in the health insurance cover one has acquired.

The health insurance companies have their approved panel of the hospital. As soon as the insured person gets admitted in to hospital on the panel, the hospital informs the insurers to send their doctors who has been assigned the job to visit the hospital within the defined region and zone to keep a track of the insured patients physical condition and the improvement as well as the quality of services rendered by the hospital.

Critical illness or fatal diseases are the main hazard, which is being covered and the best part of health insurance plan. In these days the treatment for the critical illness such as heart attack, cancer, kidney failure, Hepatitis A, B, C, HIC, CT Scan. HDL, LDL, HIV, MRI, GCT, CBC &ESR, Semen analysis, TIBC, RA factor, Mantoux test etc. are beyond affordability of common man.

For example, cost of treatment for cancer is between Rs120,000 to Rs500,000 , the cost of angioplasty is in the range of Rs125,000 to Rs500,000.

The by pass surgery costs from Rs 150,000 to 350,000 in special condition; MRI 15,000 to 20,000, cataracts Rs20,000 to 30,000, hernia surgery from Rs 30,000 to 40,000, and thallium scan from Rs 15,000 to 20,000.

One can easily realize that how difficult it is for a common person to bear exorbitantly priced life saving treatments without health insurance.