Question

Caselet 1: Rakesh is 28 years old qualified architect who works for a builder. He is earning Rs.100,000 gross but pays Rs.50,000 in expenses, most which are fixed expenses i.e. a car on loan and a rented apartment and spends the rest of his earnings of Rs. 50,000 on living and entertainment expenses.

Rakesh has a car accident and is hospitalised for one month. He then faces a long and painful rehabilitation process of 12 months to try to regain the use of one of his arms. Even with private health insurance there are medical bills to be paid particularly for physiotherapy and rehabilitation sessions. Rakesh has no income due to long absence from work for 13 months. However, he must continue to pay his lease costs of Rs 50,000 per annum. What little money Rakesh received from his company for a few months won’t cover his rental costs. Rakesh has to move back home and borrow money from his parents.

What Insurance/s could Rakesh have taken out to save himself in these difficult times?

Answer 1

Based on the caselet, there are a few insurance policies that could have helped Rakesh in the difficult times he faced after his accident:

Health Insurance: While Rakesh did have private health insurance, it appears that it did not cover all of his medical bills for physiotherapy and rehabilitation. A more comprehensive health insurance policy may have helped cover these costs, reducing the financial burden on Rakesh during his recovery period.

Disability Insurance: Since Rakesh was unable to work for 13 months due to his injury, disability insurance could have provided him with a source of income during this time. Disability insurance can provide a percentage of a person's income if they become disabled and unable to work.

Rental Insurance: Rakesh was faced with the challenge of paying his lease costs of Rs 50,000 per annum, even when he was unable to work. Rental insurance could have helped cover these costs during his recovery period, reducing the financial burden on him and allowing him to focus on his recovery.

Overall, having a combination of health insurance, disability insurance, and rental insurance could have helped Rakesh mitigate the financial impact of his accident and recovery period.

Step-by-step explanation: