Types of insurance coverages, What is insurance?

Types of insurance coverages

Types of insurance coverages, What is insurance? Any unforeseen situation in life can affect the well-being of your family. For such scenarios, India has a wide variety of life, health, and general insurance policies that provide comprehensive financial protection for your loved ones and yourself. You can also opt for insurance to protect your property and assets. Before getting any insurance, however, you need to understand the different types of insurance and then choose an insurance that suits your needs.

What is insurance?

Insurance is a legal agreement between a natural person and an insurance company in which the insurer promises financial security (sum insured) against a certain amount (premium). The types of insurance available today can be roughly divided into two categories:

  • General insurance
  • insurance

Different types of insurance policies available in India

The following types of insurance are available in India:

1. General insurance

Below are some of the general types of insurance available in India:

  • Health insurance
  • Car insurance
  • Home insurance
  • Fire insurance
  • Travel insurance

2. Life insurance

There are different types of life insurance. The following are the most common types of life insurance available in India:

  • Term life insurance
  • Life insurance
  • Foundation plans
  • Unit-linked insurance
  • Children’s plans
  • Retirement plans

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Let’s take a closer look at the different types of insurance:

Types of insurance coverages, What is insurance?

General Insurance

General insurance is one of the types of insurance that provides coverage against damage other than the death of the policyholder in the form of a sum insured. Overall, general insurance includes a variety of insurance policies that provide financial protection against damage caused by liabilities such as bicycle, car, home, health, etc. These different types of general insurance policies include:

Health insurance

Health insurance is a type of insurance policy that covers costs related to medical care. Health insurance companies will pay or reimburse the amount paid to treat an illness or injury. Different types of health insurance cover different medical treatment costs.

It usually offers protection against:

  • a) hospitalized
  • b) Treatment of serious illnesses
  • c) Medical bills after hospitalization

d) Supervision procedure

Some types of health insurance will cover the cost of on-site treatment and pre-hospitalization costs. The rising cost of health care in India makes health insurance a necessity. The different types of health insurance policies available in India include:

1) Individual health insurance: only one person is insured

2) Family Floater Insurance: Allows your entire family to take out a single plan, which usually includes a husband, wife, and two children.

3) Critical Illness Insurance: Special type of health insurance that covers various life-threatening illnesses such as stroke, heart attack, kidney failure, cancer, etc. If a critical illness is diagnosed, policyholders receive a lump sum.

4) Health Insurance for Seniors: This type of insurance plan is aimed at anyone over the age of 60

5) Group health insurance: Provided by the employer for his employee

6) Maternity health insurance: Covers medical costs in the pregnancy, postpartum, and delivery phases and offers protection for both the mother and the newborn.

7) Accident Insurance: These types of insurance plans cover financial liabilities due to accidental injury, disability, or death

Types of insurance coverages, What is insurance?

Car insurance

Car insurance is an insurance policy that provides financial assistance if your bike or car is involved in an accident. The different types of auto insurance in India include:

1) Motor insurance: This system covers privately owned four-wheelers. Different types of auto insurance – liability insurance and comprehensive insurance.

2) Bicycle insurance: These are motor vehicle insurances in which private two-wheelers are insured against accidents

3) Commercial Vehicle Insurance: One of the types of motor vehicle insurance that covers all commercial vehicles

Home insurance

As the name suggests, home insurance offers comprehensive protection for the contents and structure of your home against physical destruction or damage. In other words, home insurance provides protection against natural and man-made disasters such as fire, earthquake, tornado, theft, and robbery.

The different types of home insurance include:

1) Home construction/building insurance – Covers the structure of the house from damage in the event of an accident

2) Liability Insurance – Provides cover against damage to the insured home that a guest or third party incurs

3) Standard fire and special risk policy – against damage from outbreaks of fire, natural disasters (e.g. landslides, rockfalls, earthquakes, cyclones, and floods), and anti-social man-made activities (e.g. explosions, strikes). and riots)

4) Personal Accident – Provides you and your family with financial protection against any type of permanent dismemberment or sudden death of the life insured anywhere in the world.

5) Burglary and Theft Insurance – Provides compensation for stolen goods in the event of theft or theft

6) Home Insurance – Provides compensation for damage to furniture, vehicles, and other equipment in the event of fire, theft, flood, or riot

7) Tenant Insurance – Offers you (as a tenant) financial protection from damage to personal property in the rented house

8) Landlord Insurance – Offers you (as a landlord) protection against eventualities such as public liability and loss of rent

Types of insurance coverages, What is insurance?

Fire insurance

Fire insurance is a different type of insurance that covers all damage caused by fire along with the sum insured. These types of insurance policies usually provide substantial coverage to help both individuals and businesses reopen their locations after extensive fire damage. This type of insurance also covers war risks, civil unrest, riot damage.

There are different types of fire insurance in India –

1) Valuable Policy

2) Specific guideline

3) Floating Policy

4) Consistent policy

5) Replacement Policy

6) Comprehensive fire insurance

Travel insurance

As the name suggests, travel insurance is a type of financial protection that protects you and your loved ones while traveling to any location in India or abroad. Whether you are traveling alone or with loved ones, travel insurance will help ensure that your trip is peaceful.

Travel insurance covers all the problems you may encounter during your trip, such as loss of luggage, flight cancellations, loss of passport, personal and medical emergencies. The different types of travel insurance include:

1) Domestic Travel Insurance: Within the country

2) International Travel Insurance: For any travel or vacation outside India

3) Individual Travel Insurance: If you are traveling alone

4) Student travel insurance: If you are going abroad to study further

5) Senior travel insurance: For senior citizens between 60 and 70 years of age

6) Family Travel Insurance: For any family vacation

Life Insurance

Life insurance offers protection against unfortunate events such as the death or disability of the policyholder. Aside from financial protection, there are several types of life insurance policies that allow policyholders to maximize their savings by making regular deposits into various equity and debt fund options.

You can choose life insurance to secure your family’s financial future from the insecurities of life. The insurance covers a large amount of money to be paid to loved ones in case something happens. You have the flexibility to choose the term of the life insurance, the sum insured and the payment options depending on your financial needs. The different types of life insurance are as follows:

  • Term life insurance
  • Life insurance
  • Foundation plans
  • Unit-linked insurance
  • Children’s plans
  • Retirement plans

Term life insurance plan

Term life insurance is the purest and most economical form of life insurance, where you can opt for higher life insurance for a certain period of time. You can secure the financial future of your family with term life insurance by paying lower premiums (term insurance generally has no maturity value and therefore lower premiums compared to other life insurance products).

If something happens to you within the contract period, your relatives will receive the agreed sum insured according to the selected payment option (some risk insurances also offer several payment options)

Life insurance plans

Life insurance plans, also known as “traditional” life insurance plans, provide coverage for the insured person’s entire life, unlike other life insurance instruments that offer coverage for a specific number of years.

While a life insurance plan offers the payment of a death benefit, the plan also includes a savings component that helps achieve present value throughout the term of the contract. The maturity age for life insurance is 100 years. If life insurance survives past the maturity age, the Whole Life Plan becomes a mature foundation.

Foundation plans

Endowment life insurance essentially offers the policyholder financial protection against the uncertainties of life and enables him to save regularly over a certain period of time. When the lump-sum life plan is due, the policyholder receives a lump sum for the duration of the contract.

If something happens to you (as a life insurer), the life insurance policy pays the entire sum insured to your family (es)

Unit-linked insurance plan (ULIP)

Unit-linked insurance plans are a type of insurance policy that provides both investment and insurance benefits under a single policy contract. A portion of the premium you pay for a unit-linked insurance plan is allocated to a variety of market-linked equity and debt instruments.

The remaining premium is used for life insurance for the entire term of the contract. ULIPs give you the flexibility to choose the allocation of the premiums across different instruments according to your financial needs and your market risk tolerance.

Children’s plans

A child plan is a type of life insurance that helps you financially secure your child’s goals in life, such as higher education and marriage, even in your absence. In other words, child plans offer a combination of savings and insurance benefits to help you financially plan your child’s future needs at the right age.

The due amount can be used to meet your child’s financial needs.

Retirement plans

A retirement plan also called a retirement plan, is a type of investment plan that will help you build up some of your savings over time. Basically, a pension plan helps you to cope with the financial uncertainties after retirement by ensuring you a steady income even after your years of work.

With a pension fund, you can create a financial cushion for your life after retirement, into which you regularly pay a certain amount until you retire. After that, the accumulated amount will be reimbursed to you at regular intervals in the form of an annuity or annuity.

Tax Benefits of Various Types of Insurance

The premium amount for various types of life insurance is tax-deductible

1. Pursuant to Section 80C of 1981 Income Tax, the premium payable on all types of life insurance plans is tax-deductible up to Rs. 1.5 lakh

2. Pursuant to Section 80D of 1981 Income Tax, the premium payable on all types of health insurance plans is tax-deductible, subject to a maximum of Rs 25,000 for the self-employed, wife, and children, plus parents under the age of 60. (Tax savings can be up to 50,000 rupees for seniors and 50,000 rupees if parents are seniors. The total deduction can be up to 1 lakh rupees.)

Factors that determine your life insurance coverage

Although life insurance coverage and its premiums depend on various factors, some important factors are:

Factors that determine your life insurance coverage

1. Age of the policyholder

2. State of health – both current and historical

3. Profession

4. Habit of smoking and drinking

5. Type of insurance policy

6. Claim history

7. Location

You have read about the different types of insurance that you can get based on your needs and requirements. However, for more questions about different types of life insurance, you can contact Max Life Insurance. We have a range of life insurance solutions under each category so that you can choose the one that suits you best. The maximum claims settlement rate for life insurance for the financial year 19-20 is 99.22% from the annual audited financial year 19-20. Our 24/7 customer support makes it easy for you to choose one of the wide variety of life insurance policies from Max Life Insurance.

Asked Questions 

Q. What are the different types of insurance in India?

A. Following are the types of insurance in India:

1. General Insurance

The different types of general insurance in India are given below:

health insurance

car insurance

home insurance

fire insurance

travel insurance

2. Life Insurance

Following are the different types of life insurance available in India:

risk insurance

  • Term life insurance with premium reimbursement
  • Unit Linked Insurance Plans
  • Foundation Schemes
  • Insurance
  • group life insurance
  • child insurance plan
  • retirement provision

Q. What is Insurance?

A. Insurance is a legal arrangement between an individual and an insurance company. The insurer or insurance company promises financial security or sum assured for contingencies. To be eligible for insurance, individuals or customers have to pay an insurance premium which depends on various factors.

Q. Should you consider the claim settlement rate before buying insurance and choosing an insurance company?

A. Yes, the claim settlement rate is an important factor before choosing an insurance provider. The claim settlement ratio or claim payout ratio is the total number of claims made by the customers versus the total number of claims processed by the insurance provider. You should review the claim settlement relationship to ensure that you or your nominee is not facing any problems at the time of settlement of claims.

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Types of insurance coverages, What is insurance?

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