What is Insurance? - Types of insurance
In today’s world, we cannot guess what could happen next in our lives or you can say what could happen in the next 10 years. No one knows the truth behind it.
So, to save your family members or to keep yourself healthy, and at a times when you have some financial condition what would help you in these situations or how would you deal in these tough situations ?
Have you thought of any plan or anything else so that you could not face these situations. A thing which can help you in these tough situations. If you are sick or you have some financial condition, any of your family member is not fine or is in need of something, the answer for all these questions is to get an insurance.
Yes, at this time taking insurance is the only situation to deal with all these problems. That’s why there are different types of insurance for different types of situations for example health insurance, life insurance and more.
So let us first know, what exactly insurance is.
What is Insurance Policy ?
An insurance is a contract in which the insurer identifies another against losses from perils and specific contingencies. In simple words, insurance is a term in law and economics. In the contract, you should pay regular amount of the money to the insurers. If something wrong happens to the person or thing which is insured, the company that insured will pay the money back.
In the case of eventuality, the insurers provides a lump sum amount to the nominee or policyholder. There is many components of insurance policy which helps a lot in choosing plans which is most suitable for your needs.
- Insurance Policy Premium:
In the insurance policy premium, it is typically expressed as a regular cost, monthly, quarterly, half yearly or annually which incurred during the premium payment term.
- Policy limit:
In the policy limit, it is determined as based on the period of loss or injury and similar other factors.
Higher the Policy limit, higher will be the premium payable.
- Deductible:
Under insurance policies, Deductible is the amount or percentage that the policyholder agreed to payout of pocket before the insurer sets into a settle a claim. Deductible are the applicable per policy as defined by the terms of an specific types of the policy.
As mentioned above there are different types of insurance policies for every situation to deal with. So below is a brief information about each and every insurance and its benefits too or for what situation the particular insurance policy works for.
Types of insurance policies:-
There are mainly eight types of insurance policies that you can have and save your life based on these policies. Let's have a brief summary about all insurance policies.
1. Life insurance:-
It refers to a policy where the policyholder can ensure financial freedom for their family members after their death. If you are the sole earning member in your family, your death would financially devastate the whole family. There are also seven types of insurance policy when it comes to life insurance.
These are:
- Term plan
- Endowment plan
- ULIPs Unit linked insurance plans
- Whole life insurance
- Child's plan
- Money back
- Retirement plan
Benefits of life insurance:-
- Tax benefits
- Encourages saving habit
- Secures family's financial future
- Helps plan your retirement
2. Motor insurance:-
It refers to the policies which offer financial assistance in the event of accidents involving your car and bike. It can be available for three categories of motorized vehicles like car insurance, Two wheeler insurance and commercial vehicle insurance . There are also three types of motor insurance.
These are:
- Third Party Liability
- Comprehensive Cover
- Own damage cover
Benefits of motor insurance:-
- P legal hassle
- Meets all third party Liability
- Financial assistance to repair your own vehicle
- Theft/loss cover
3. Health insurance:-
It refers to a type of general insurance which provides financial assistance to the policyholder when they are admitted to the hospital for treatment.
The only benefits of health insurance are:
- Medical cover
- Cashless claim
- Tax benefits
Types of health insurance policy:-
- Family floater insurance
- Individual health insurance
- Critical illness cover
- Senior citizen health insurance
- Group health insurance
- Maternity health insurance
- Personal accident insurance
- Preventive healthcare plan
4. Travel insurance:-
Travel insurance may offer financial aid at various times such as during loss of baggage, trip cancellation and many more. These policies ensures the financial safety of a traveler during a trip.
The benefits of travel insurance are:
- Cover flight delay
- Baggage loss
- Trip cancellation cover
- Reclaim lost travel document
Types of travel insurance:-
- Domestic travel insurance
- International travel insurance
- Home holiday insurance
5. Property insurance:-
Through property insurance plans, any building or immovable structure can be insured. It can be either your residence or commercial space.
The benefits of property insurance are:
- Burglaries
- Floods
- Natural calamities
- Protection against fires
Types of property insurance in India:-
- Home insurance
- Shop insurance
- Office insurance
- Building insurance
6. Mobile insurance:-
It allows you to reclaim money that you spend on repairing your mobile in the event of accidental damage.
The benefits of mobile insurance are:
- Comprehensive protection for new devices
- Coverage against damage on screen
- Robbery or theft of smartphone
7. Cycle insurance:-
This policy ensures that you have access to necessary funds should your bicycle undergoing accidental damage or theft. It also ensuring immediate repair to the vehicles.
The benefits of cycle insurance are:-
- Worldwide coverage
- Protection against fires and riots
- Accidental death benefit
8. Bite size insurance:
It refers to sachet insurance plans which minimizes your financial liability for very limited tenure and generally up to a year. This insurance allows you to protect your finances against specific damage or threats.
The benefits of bite size insurance is that it allows you to avail financial protection at very limited prices. It hardly makes any impact on your overall monthly expenditures.
0 Comments: