Life Insurance
Life insurance is a great way to protect your family or leave a legacy. When your estate is sorted out it can cover long-term expenses such as funeral expenses, medical bills or mortgage payments. But the way to get it can be different. If you’re young, healthy and looking for quick coverage, comparing life insurance quotes online is a great place to start. But if you’re over 50 or in poor health, you may need to work directly with an agent to find the best coverage for your needs.
What Is Insurance?
Most people have some form of insurance for their car, their home or their life. Yet most of us don’t stop to think much about what insurance is or how it works.
In simple terms, insurance is a contract, represented by a policy, in which the policyholder receives financial protection or compensation against loss from the insurance company. The company pools client risks to make payouts more affordable for the insured.
An insurance policy is used to protect against the risk of financial loss, both large and small, that may result from liability for damage to the insured or their property or loss or injury to a third party.
How Insurance Works
There are a multitude of different types of insurance policies available, and virtually any person or business can find an insurance company willing to insure them—for a price. The most common types of personal insurance policies are auto, health, homeowners, and life. Most individuals in the United States have at least one of these types of insurance and car insurance is required by law.
Businesses require specific types of insurance policies that insure against specific types of risks faced by a particular business. For example, a fast-food restaurant may require a policy that covers damage or injury resulting from cooking with a deep fryer. Auto dealers are not subject to this type of risk but require coverage for damage or injury during a test drive.
Insurance Policy Components
Types of Insurance
- Following are some of the types of general insurance available in India:
- Health Insurance.
- Motor Insurance.
- Home Insurance.
- Fire Insurance.
- Travel Insurance.
Insurance Types You Should Know
Insurance is a legal contract between an individual and an insurance company, under which, the insurer promises to provide financial coverage (sum assured) against contingencies for a sum of money (premium). The types of insurance in India can be broadly divided into two categories:
- General Insurance
- Life insurance
Different Types of Insurance Policies Available in India
Following are the types of insurance available in India:
1. General Insurance
Following are some of the types of general insurance available in India:
- Health insurance
- Motor insurance
- Home insurance
- Fire insurance
- Travel Insurance
2. Life insurance
There are different types of life insurance. Below are the most common types of life insurance plans available in India:
- Term Life Insurance
- Whole life insurance
- Endowment Schemes
- Unit-Linked Insurance Schemes
- Child Plans
- Pension Schemes
Let’s take a closer look at the different types of insurance policies:
General Insurance
A general insurance policy is one of the types of insurance that provides coverage in the form of sum assured against losses other than the death of the policyholder. Overall, general insurance includes various types of insurance policies that provide financial protection against losses due to liabilities such as bike, car, home, health and the like. These different general insurance types of insurance policies include:
Health Insurance
Health insurance is a type of insurance policy that covers expenses incurred due to medical care. Health insurance plans pay or reimburse the amount paid for the treatment of any illness or injury. Different types of insurance policies cover different medical care expenses.
It usually protects against:
A) Hospitalization
b) Treatment of serious illnesses
c) Medical bills after hospitalization
d) Daycare procedures
There are some types of health insurance plans that also cover residential treatment and pre-hospitalization expenses. Health insurance is becoming a must in India due to rising healthcare costs. The various types of health insurance plans available in India include:
1) Individual Health Insurance: Provides coverage to an individual only
2) Family Floater Insurance: Allows your entire family to get coverage under a single plan, which usually covers husband, wife, two children.
3) Critical Illness Cover: A special type of health insurance that provides coverage against various life-threatening illnesses like stroke, heart attack, kidney failure, cancer and similar others. Policyholders get a lump sum on diagnosis of critical illness.
4) Senior Citizen Health Insurance: These types of insurance plans cater to all individuals above 60 years of age.
5) Group Health Insurance: Offered by the employer to his employees
6) Maternity Health Insurance: This type of insurance covers medical expenses for the prenatal, post-natal and delivery stages, providing protection to both the mother and the newborn.
7) Personal Accident Insurance: These types of insurance plans cover financial liabilities arising out of accidental injuries, disability or death.
Motor Insurance
Motor insurance is a type of insurance that provides financial assistance in case your bike or car is involved in an accident. Different types of motor insurance policies in India include:
1) Car Insurance: Individually owned four-wheelers are covered under this plan. Types of car insurance include third-party insurance and comprehensive cover policies.
2) Bike Insurance: These are types of insurance policies that cover personally owned two-wheelers against accidents.
3) Commercial Vehicle Insurance: This is one of the insurance types, which provides coverage to any vehicle used for commercial purposes.
Home Insurance
As the name suggests, a home insurance policy provides comprehensive protection against any physical destruction or damage to the contents and structure of your home. In other words, this type of insurance will provide coverage against any natural and man-made calamity, such as fire, earthquake, tornado, burglary and robbery.
Different types of home insurance policies include:
1) Home Structure/Building Insurance – Protects against damage to the home structure during any calamity
2) Public Liability Coverage – The insured provides coverage against any loss to a guest or third-party on the residential property.
3) Standard Fire and Special Perils Policy – Coverage against loss due to outbreak of fire, natural calamities (e.g., landslides, rockslides, earthquakes, storms and floods), and non-social man-made activities (e.g., explosions, strikes and riots)
4) Personal Accident – Provides financial coverage against any kind of permanent dismemberment or sudden death of the insured person, anywhere in the world to you and your family.
5) Burglary and Theft Insurance – Provides compensation for stolen goods in case of burglary or theft.
6) Contents Insurance – Provides compensation for loss of furniture, vehicles and other equipment in case of fire, theft, flood or storms
7) Renters Insurance – Provides financial protection to you (as the tenant) against any loss of personal property while living in a rental property.
8) Landlords Insurance – Provides coverage to you (as the landlord) against contingencies such as public liability and loss of rent.
Fire Insurance
A fire insurance policy is a different type of insurance coverage that compensates any loss due to fire with the sum assured. These types of insurance policies typically provide a significant amount of coverage to help both individuals and companies reopen their locations after extensive fire damage. These insurance types also cover war risk, unrest, riot losses.
There are different types of fire insurance in India –
1) Value policy
2) Specific policy
3) Floating Policy
4) Result oriented policy
5) Replacement Policy
6) Comprehensive fire insurance policy
Travel Insurance
As the name suggests, travel insurance is a type of insurance policy that provides financial security to you and your loved ones when you visit any place in India or abroad. Whether you are traveling alone or with your loved ones, travel insurance coverage will help ensure that your journey is peaceful.
Travel insurance policy coverage can take care of any problem you face during your trip like loss of luggage, flight cancellation, loss of passport, personal and medical emergencies. Different types of travel insurance policies include:
1) Domestic Travel Insurance: Within the country
2) International Travel Insurance: For any trip or vacation outside India
3) Personal Travel Insurance: If you are traveling alone
4) Student Travel Insurance: If you are going abroad for further studies
5) Senior Citizen Travel Insurance: For senior citizens, between 60 to 70 years of age
6) Family Travel Insurance: For any family holiday
Life Insurance
Life insurance plans provide coverage against unfortunate events like death or disability of the policyholder. Apart from financial protection, there are various types of life insurance policies that allow policyholders to maximize their savings through regular contributions to various equity and debt fund options.
You can opt for a life insurance policy to protect your family’s financial future against life’s uncertainties. The policy coverage includes a large sum of money, which is payable to your loved ones if anything happens to you. With this insurance type, you have the flexibility to choose the life insurance policy term, coverage amount and payment option depending on the financial requirements. The different types of life insurance policies are as follows:
- Term Life Insurance
- Whole life insurance
- Endowment Schemes
- Unit-Linked Insurance Schemes
- Child Plans
- Pension Schemes
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