Dear Readers welcome to insurancemarketz.com, greetings of the day, as we all know that our lives is becoming hectic and due to want and need of speedy growth in life as our aspiration grows on a daily basis. So, in order to fulfil these aspirations of ours we have to work very hard but these hard works and aspirations needs a kind of security and protection which can be only provided through various insurance policies.
<<Types Of Insurance>>
Friends if we want to know about any insurance policy we generally goto Goolge, Bing or other search engine like Rediff we even visit some of the websites like Policy Bazaar, Bank Bazaar, Cover Fox, Life Insurance Corporation Of India, Max Life Insurance, etc when we want to know about any specific insurance policy but generally we don’t find any place where we can get complete information and details on types of insurance polices.
So, Our Today’s Article Is All About – Types Of Insurance.
So Let’s Go Through It, If something happens to you make sure your family is taken care of…..so you need the security of insurance.
There Are Two Types Of Insurance:
- Life Insurance
- General Insurance
Now let’s understand what is life and general insurance and why do we need it.
What is Life Insurance ?
People who do not know about life insurance, think about how can one insure a life with money. How can anyone save our life, as we all know that life is not in hands of anyone, no one can buy it with money. Then how life insurance is possible ?
Then let us tell you that no company can save life from life insurance, but the company can only give a financial help to your family when god forbid but you are no more in this world or due to any reasons you cannot earn.
A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit or accident benefit, to beneficiaries upon the insured’s death or disability known as disability insurance.
Typically, life insurance is chosen on the basis of the needs and goals of the insurance policy buyer. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole life insurance and universal life insurance, provides life time coverage. Even life insurance supports you and your family after your retirement.
It’s important to note that death or accident benefits from all types of life insurance are generally income tax-free.
Life Insurance Can Be Categorised Into Various Types:
- Term Insurance: It is most basic type of life insurance, Term insurance is a life insurance product offered by an insurance company which offers financial coverage to the policy holder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary.
Your family gets a lump-sum amount in the case of your death. If, however, you survive the term, no money will be paid to you or your family.
- Whole life Insurance: Whole Life plan is also called as straight life or ordinary life. It remains throughout with the insured for the whole life time provided the premiums are paid timely or paid with small late payment fees. A certain aforementioned amount is paid to the nominee in the event the insured dies. The policy holder at any given point of time may withdraw the policy or borrow against it.The maturity age for this policy is 100 years. If the insured lives past the maturity age, the policy will become matured endowment.
- Endowment Policy: An endowment policy is a life insurance contract designed to pay a lump sum after a specific term on its ‘maturity’ or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness. If the life insured dies within the maturity period the insurance company will pay the sum assured to the beneficiary.
- Unit-Linked Insurance Plans ( ULIPs): Unit Linked Insurance Plans generally called as ULIP Plans are investment cum protection plans that offers you dual benefits of availing market linked returns on your investments along with life insurance cover.
You have an option to choose from a variety of funds available under the selected life insurance plans along with the flexibility to manage and switch between funds.
It is such a product that doubles up as investment tools. A part of your premium goes towards your insurance cover while the remaining amount is invested in Debt and Equity.
- Money-Back Policy: Money-back policy is a policy which gives money-back at regular intervals. This money-back is paid during the plan tenure and is a percentage of the Sum Assured. Money-back pay-outs are called Survival Benefits. These benefits are paid during the plan tenure and on maturity, the remaining Sum Assured is paid along with vested bonuses. it is most popular insurance plan in India. 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. This is regardless of the survival benefit payments made.
- Child Plans: It is an investment plan and the most beneficial policy for your child as it ensures continued education and a secured future. It makes sure that the child receives all financial aid he requires for an overall development in all the years of growth. This ensures your child’s financial security. The insurer pays the premium amounts after your death and your child will continue to get a certain sum of money at specific time interval.
- Pension Plans: Pension plan is a type of investment plan for you after your retirement that’s why it is called retirement plan. It is like a plant which allocates a part of your saving to accumulate over a period of time and provide you a regular income after retirement. Pension plans basically helps to build your retirement fund or senior life insurance and give a steady amount after retirement. In a case of your death your family can claim the sum assured.
Tax Benefits If You Opt For Life Insurance:
Life insurance not only ensures the well-being of your family, it also brings tax benefits-
- The amount you pay as premium can be deducted from your total taxable income.
- However, this is subject to a maximum of Rs 1.5 lakh, under Section 80C of the Income Tax Act.
**The premium amount used for tax deduction should not exceed 10% of the sum assured.
This Was All About Life Insurance In Short & Crisp Form, Now Let’s Have A Look At The Second Type Of Insurance And That Is General Insurance.
What is General Insurance ?
General insurance is also known as non- life insurance policy. It is covers automobile and homeowners policies, it provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that does not belong to life insurance. Our life carry lots of risk therefore General Insurance Plans which provides us with financial protection in the event of losses which occurs due to fire, storm, flood, earthquake, car accidents, theft and other travel accidents.
It also covers the expenses which we spend on the legal actions. Now it’s up to you that how wisely you choose the right type of insurance policy as per your requirements.
Please Do not get confused between Life Insurance and General Insurance. They both cover different aspects of life. Life Insurance cover risks of death, accident, physical disability and its consequences, whereas, General Insurance looks after the risks of other aspects of life and its different assets.
Types of General Insurance:
- Motor Insurance: Motor insurance looks after the risk of car, bike and, other vehicles. It comes under general insurance, it gives financial protection to our vehicle from loss due to accident, damage, theft, fire and nature’s disaster.
##You can also insure your commercial vehicle under motor insurance.
And in India you can’t drive and ride without motor insurance because According to motor vehicle act, 1988 it is mandatory for all vehicle to be insured.
Let’s understand the different categories of motor insurance or auto insurance:
- Car Insurance: Car is very precious asset in your life as you paid lakhs of rupees to buy that beauty and a single scratch hurts you a lot, so think about the bigger damage. You can save yourself from this pain through insuring your car.
The way car insurance works is-
Pay Annual Premium
Get Car Insurance Cover
Insurer Pays For Damages During The Whole Year
- Two Wheeler Insurance or Motor Cycle Insurance: It’s similar to car insurance but as per its name it covers your two wheeler vehicle like bike, scooty and other two wheeler vehicles as it all comes under motor insurance.
The Motor Cycle Insurance Or Motor Insurance is same as car insurance so you can’t ride your bike without insurance in India.
Let’s understand about its working-
Decide Your Plan Which You Are Planning To Take
(Like 1 Year or 2 Years)
Pay the Premium Amount
Insurer Pay For Damages According To Your Plan.
Types of Motor Insurance:
- Third Party Insurance: Third party insurance is to compensate for the damages caused to another party.
In a simple words you can say that third party insurance cover the losses when our vehicle accidentally hits another vehicle, and at that time the offended party has the right to raise a claim for damages and this claim will be covered by the third party car insurance policy or auto insurance.
- Comprehensive Car Insurance: Comprehensive insurance covers all your losses, either the loss is caused by you or a third party. As well as it covers all losses caused by accident, fire, theft, sabotage or natural hazard. It is also known as fully covered insurance. It provides the highest level of protection to our motors, its works like vehicle-guard in our life.
The Another Type Of General Insurance Is Health Insurance, so let’s discuss about it:
- Health Insurance: It basically provides coverage for cost of medical care to those person who have taken the health insurance policy. Depending on the health insurance plan chosen by the policy holder, he/she can get coverage for critical illness expenses, surgical expenses, hospital expenses etc. It pays for or reimburses the amount you pay towards the treatment of any injury or illness.
It Generally Covers:
- Our pre medical bill or post hospitalisation
- Injury by accident or critical disease
- Medical surgery or operation
As per your choice you can adopt additional benefits like-
Accident Cover: It can bear your medical expenses caused by accidents and mishaps.
- Home Insurance: House is a place where we live with full love and affection. it’s not only the combination of bricks and concrete rather it’s a place and memory of our small- small happiness which we spent with our loved and dear ones. At any cost we want to save our house from any damages and losses. Home Insurance is the best plan to protect our dream house from all types of misfortune.
Prepare your home to be protected from natural and supernatural home disasters. It covers liabilities due to fire, burglary, theft, flood, natural disaster, cyclones and sabotage. It not only offers financial protection to your home, but also takes care of the valuables inside the property.
- Travel Insurance: Travelling is the most adventurous and pleasant part of our life, but if our journey and life is not secure then at that situation we can’t enjoy as much as we think. As in our day to day life we travel everyday for school, office, meeting or some specific places it’s a part of our daily life and due to increase in rate of accident we can’t take risk of our near and dear one’s life so firstly we have to release our tension and pressure in the form of travel insurance because our life is not a pressure cooker our life is limited so, enjoy every second of your life by choosing a travel insurance policy.
A 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.
- There Are Two Types Of Travel Insurance:
- Single Trip Policy: Single trip policy covers your trip that lasts under 180 days.
- Annual Multi Trip: Annual trip policy cover your multiple trips that you take within a year.
Friends, we hope you liked reading about the various types of insurance policies and we are very sure that you are mature enough to evaluate the importance of buying an insurance for yourself and as per requirements, so don’t wait just opt for it and secure yourself, your loved ones and your precious belongings.
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