Types in Insurance in india
Insurance is very important for all because it gives assurance, if anything wrong happen to us!
Why insurance is required?
Ex: For suppose you are going to office or when you are going to attend a small function or when you are in exhibition etc. risk is everywhere. To overcome such loss, insurance is required.
Insurance policies are broad classified into two categories. They are:
- Life Insurance &
- General Insurance.
Again these are categorised into many sub categories.
What is Life Insurance and why it is required?
A life insurance is a contract that offers financial compensation on any risk occurred to life of a human. A life insurance compensates financial support to your family if any risk happens.
As a human being we are living risk life. No place is safe on the earth. If any risk happens suddenly to us our dependents will fell on the roads. No one can get back our life, but we can make our dependents not to fell on the roads by taking life insurance policy.It gives insured money to our dependents after risk happens.
Life insurance is sub-categorized into the following policies:
- Term insurance or Term plan
- Whole life insurance
- Endowment plan
- Unit linked insurance plan (ULIP)
- Money back policy
- Children’s policy
- Retirement plan
|Term Insurance or Term Plan||Basic type and covered for a specific period. If risk happens your family gets lump-sum amount.|
|Whole life insurance||Covers your life time. if risk happens your family receives total amount|
|Endowment plan||Same like Term plan but the difference is if risk doesnot happens you receive full amount on maturity of plan|
|ULIP||A part of your insurance goes towards insurance premium and remaining amount invested in Debt and Equity.|
|Money Back Policy||A certain percentage of the sum assured will be paid to you periodically throughout the term as survival benefit.
After the expiry of the term, you get the balance amount as maturity proceeds.
Your family gets the entire sum assured in case of death during the policy period
|Children’s Policy||This ensures your child’s financial security.In the event of your death, your child gets a lump-sum amount.Your child will continue to get a certain sum of money at specific intervals.|
|Retirement Plan||This helps build your retirement fund.
You can get a regular pension amount after retirement.
In the case of your death, your family can claim the sum assured
What is General Insurance and why it is required?
A general Insurance is a contract that offers financial compensation on any loss occurred other than life. It insures everything other than life. A general insurance compensates you financial loss to your House, Car, bike, health, travel, mobile etc. The insurance company is promises to pay when the damages to your vehicle or building, medical treatments to cure your health problems.
General insurance offers financial protection to all our assets against damage, theft etc.
General insurance is sub-categorized into the following policies:
- Health Insurance
- Motor Insurance
- Fire Insurance
- Damage Insurance
- Travel Insurance
The above 5 are main categories in General Insurance. Apart from the above there are some more like mobile insurance, laptop insurance etc.
|Health Insurance||Covers the cost of medical care. It pays for or reimburses the amount you pay towards the treatment of any injury or illness.|
Financial protection to your vehicles from loss due to accidents, damage, theft, fire or natural calamities
You can also get motor insurance for your commercial vehicles
Compensates for the damages caused to your property or goods due to fire.
It covers the replacement, reconstruction or repair expenses of the insured property as well as the surrounding structures.
It also covers the damages caused to a third-party property due to fire.
Compensates you for damage to your home due to natural calamities, man-made disasters or other threats.
It covers liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage. It not only offers financial protection to your home, but also takes care of the valuables inside the property
|Travel Insurance||Compensates you or pays for any financial liabilities arising out of medical and non-medical emergencies during your travel abroad or within the country|
Even Govt. is encouraging Insurance policies by giving Tax benefits, Tax exemptions & Tax deductions on the payment of insurance premiums and receipt of insurance claims.
Insurance cannot cover the following
- If death occurred due to alcohol, drug, war, suicide etc.
- If car damaged when diving by taking alcohol, driving without licence etc.
- If willful destruction of the property.