Top 3 Insurance for Seafarers
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A ship’s life span is protected against various damages and natural calamities. This is known as Marine Insurance, which is vital to modern-day shipping. Practically speaking, anything that you touch and any operation onboard is insured by organizations.
Ensuring the preservation of life and well-being should always take precedence over material possessions. Therefore, seafarers need to understand and obtain suitable insurance coverage at the right time and for the appropriate amount, given the unique risks associated with their profession.
In this blog, we will explore the three essential insurances every seafarer should have, shedding light on their significance and why they are indispensable.
Confused about which insurance is best for you and which insurance you should take? Get answer of all such queries from our Insurance for Mariner’s guidance series.
1. Insurance
In basic terms, insurance is a GUARANTEE that if something goes wrong, you won’t have to stress about the financial burdens that come after the event.
It is a contract or an agreement in which the insuring company agrees to provide a certain financial cover for a specific risk that the insured individual might face in the future. In return, the individual has to pay a certain sum called a ‘PREMIUM’ to the insurance company.
Insurance for Seamen is a widely accepted topic and the ship owner is always responsible for providing necessary aid to their employees in case needed. It is very clearly instructed under the Maritime Labour Convention,2006.
2. Importance of Insurance.
Some of the benefits of having insurance are as follows:
- A Sound mind without any worry
- Better financial security and risk appetite
- Tax Benefits
- Assured Income for your Family in your Absence
- Access to better medical facilities
Seafarers work in some of the most hazardous and life-threatening environments. Accidents do not post a notice before happening. Although Loss-time injuries across the maritime sector have greatly reduced due to better safety practices and stringent inspection procedures, accidents do still happen.
Thus, every seafarer should be aware of the benefits and needs of proper insurance
3. Top 3 Insurances for every seafarer
Seafarers’ Insurance Claims can sometimes be very challenging due to several reasons. Most of the reputed companies genuinely care about their employees and take the initiative to help them. Apart from the company’s corporate insurance, it is always advisable for seafarers to buy personal insurance for themselves and their families.
Check out complete information about Insurance for seafarers with our dedicated course on Insurance for Seafarers.
Here are the top 3 insurance that every seafarer must invest in:
3.1. Life Insurance for Seafarers
- Most financial advisors will advise you to buy a life insurance policy before investing. This is because your life and well-being are the most valuable assets that you can have. Protecting them should be your no. 1 priority.
- It is very beneficial to sustain your family in the event of your sudden demise or a lifetime disability incident.
Types of Life Insurance
Broadly Speaking, Life insurance can be categorized into the following two types:
Term Plan
- The Insurance company covers you for a specific Term chosen by you, say 20-60 years of age. If something happens to you during this ‘term’, the company will pay the sum assured, say Rs 1 Crore, to your family.
- If nothing happens to you, the insurance company will not pay a single dime to you.
Maturity/Endowment Plan
- The insurance company will pay the sum assured if something happens to you during the period chosen, say, 20-60 years of age.
- If nothing happens to you during this period, the company will pay you back the premium paid by you.
- It is more of an investment product than an insurance product.
Best Life Insurance Plan for Seafarers
It is advised that the Term plan may be the best for seafarers as you will have to pay a very low premium for the same ‘sum assured’. The premium decided is mostly constant throughout the term and due to inflation the same premium amounts to a small sum of money in the long run.
Endowment Plans are known to have extracted more than they gave back to the individual.
Factors to consider while buying life insurance:
- ADD ONs- In addition to covering your untimely death, the following events should be added to the existing insurance policy: Critical illness, disability, Premium waiver on critical illness, and Premium waiver on disability.
- Always choose a reputed brand
- Settlement or Claim Ratio of the company should be high
- Disclose every detail so that claim settlement is smooth. For Example, existing illness, smoking habits, etc
Best Life Insurance Plan for Seafarers:
3.2. Health Insurance
- For a seafarer, health hazards can arise from a lot of reasons and a variety of forms.
- Although most reputed companies provide Corporate health insurance, it is best to buy a separate health insurance plan for you and your FAMILY.
- A health insurance company promises to cover your financial expenses in case of a medical emergency and charges an annual premium for this guarantee. The premium will be based on the covered amount, age of the insured, medical history, etc.
Types of Health Insurance
Numerous types of Health insurance plans can be bought. We will focus on the most common types.
Individual Plan
- As the name suggests, this type of health insurance will benefit an Individual in case of hospitalization.
- Premiums are decided on the specific individual’s age and health.
- The covered amount will be separate for each individual. For example, if you take a cover of Rs 5 lakhs for yourself and your parents individually, each insured person will be entitled to claim Rs 5 Lakhs
Family Floater Plan
- Family Floater Plans cover the entire family of an individual and are one of the most common plans bought.
- The premium is decided on the basis and the health of all of the individuals of the entire family
- The covered amount will be the same for all individuals. For example, you take a cover of Rs 5 lakhs, and one of your family members gets hospitalized someday. You claim Rs 2 Lakhs from the insurance, Hence, you will have 3 Lakhs left for other family members
Best Health Insurance Plan for Seafarers
This can be different for different people, but as a general rule of thumb, you should buy an individual health insurance plan apart from your parents’ health insurance. Some families may also benefit from the low premium of the family floater plan. But in case multiple individuals need hospitalization, the cover will be reduced.
Factors to consider while buying health insurance
- The claim-settlement ratio of the insurance company should be high.
- Check if your preferred hospitals are covered by the Health Insurance Policy
- More the flexibility. Better the plan.
- The plan should have exhaustive coverage for both pre and post-hospitalization expenses.
- The waiting period for pre-existing diseases should be as low as possible.
- The No-Claim Bonus should be High
3.3. Home Insurance
- Everyone wants to live under a roof that they can call ‘Home’. The truest form of happiness and content comes from owning a house or a flat.
- Home Insurance provides you a guarantee that if your home is damaged, the insurance company will cover the financial cost related to it.
- It provides a cover against fire, theft, riots, natural disasters like earthquakes, floods, cyclones, etc.
- The cover is generally for a period of up to 10 Months
Types of Home Insurance:
Broadly Speaking, Home Insurance can be of the following types:
Structure Insurance
- As the name suggests, it covers any damage to the overall structure of the house due to any of the above-mentioned factors.
- Premium is decided based on factors such as Location, Property Value, Security Measures, Construction Materials, Age, etc.
Content Insurance
- It provides cover against the things/contents that are inside the house, for example, furniture, jewelry, consumer goods, etc
- Premium is decided based on factors such as Value of content, coverage limits, claim history, etc.
Best Home Insurance for Seafarers
It is advisable to have both structure and content insurance for your home as your home is your most priced possession This will help you be at peace of mind.
Factors to consider buying home insurance
- It is important to have a policy that covers the replacement cost which is the cost of building your house completely in case of total damage.
- Ensure you read all your documents clearly and understand every aspect. Seek professional help if necessary.
4. Conclusion
Traditionally many families in India considered it taboo to get insured against life and health hazards. They believed that it might increase the chance of something bad happening. Lack of sufficient information and confusion are some of the reasons many families do not have any insurance.
As Seafarers, it is essential to get insured as they are susceptible to Life-threatening situations and health hazards at all times onboard a vessel. Nobody would want their families to become helpless or drain all of their savings in case of an Emergency.
This blog should have given you a rough idea about what insurance is all about and why is it important
5. FAQs
Q1. What is the right age to buy insurance?
Ans. The Best time to buy Health and Life Insurance will be between 20-25 years of age. The premiums are very low during this period and it helps you plan your life better.
Q2. What should be the minimum amount of Life insurance?
Ans. The minimum amount covered in the life insurance should be at least 10 times your Annual Salary. Ideally, It should be about 20 times your annual salary.
Q3. What is the ideal period for term life insurance?
Ans. The best period for a term life insurance should be the age you start earning till the age you feel nobody depends on you financially. Say, 23-65 years of age for most people. What should be the minimum coverage of health insurance Rs 5 Lakhs. Ideally, it should be as high as you can afford.
Q4. Is the insurance bought in India valid in other ports and countries?
Ans. In most cases, it should be valid if you declare your profession and traveling requirements correctly. Make sure you declare every little detail and know about every related form. You might have to pay a slightly higher premium though
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