The Beginner's Guide to Insurance
Having the right kind of insurance is central to sound financial planning. Some of us may have some form of insurance policy but very few really determine what it is or why one must have it. For many Indians insurance policy is a form of investment or a superb tax saving avenue. Inquire a typical person about his or her investments and they will proudly mention an insurance policy product as part of their core investments. Of the approximately 5% of Indians that are insured the proportion of those adequately insured is a lot lower. Very few of the insured view insurance as purely that. There is perhaps no other financial product that has seen such rampant mis. Promoting at the hands of agents who are over enthusiastic in selling products connecting insurance to investment generating them fat commissions. General Insurance Guidelines indiaJust what is Insurance?
Insurance is a way of distributing out significant financial chance of a person or business entity. To a big group of individuals or business entities in the occurrence of an unlucky event that is predefined. The cost of being insured is the monthly or twelve-monthly compensation paid to the insurance company. Inside the purest form of insurance if the predefined event does not occur until the period specified the money paid as payment is not retrieved. Insurance is effectively a means of spreading risk among a pool of folks who are insured and lighten their financial burden in the event of a shock.
Types of Insurance
[caption id="attachment_14367" align="alignleft" width="300"]
insurance word on business folder showing risk management concept[/caption] Potentially any risk which can be quantified in conditions pounds can be insured. To guard loved ones from damage of income due to immature death one can have a life insurance policy. To guard yourself and your family against unforeseen medical expenses you can opt for a Mediclaim policy. To protect your vehicle against robbery or harm in accidents you might have a motor insurance policy. To guard your home against fraud, damage due to fire, flood and other challenges you can choose a home insurance.Most popular insurance forms in India are life insurance, health insurance and motor insurance. Apart from these there are other forms as well which are discussed in quick in the following sentences. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).
Insurance coverage
This specific form of insurance provides cover against financial chance in the event of premature death of the insured. There are twenty-four life insurance companies playing in this arena of which Life Insurance Corporation of India is a open public sector company. There are several varieties of life insurance policies the simplest form of which is expression plan. The other complex policies are endowment plan, whole life plan, money back plan, ULIPs and annuities.
General Insurance
Just about all other insurance policies besides Life Insurance fall under General Insurance. There are 24 general insurance providers in India of which 4 namely National Insurance Organization Ltd. New India Guarantee Company Ltd, Oriental Insurance policy Company Ltd and United India Insurance Company Ltd are in the public sector domain.
The biggest pie of non-life insurance in conditions of premiums underwritten is shared by motor insurance followed by executive insurance and health insurance. Other kinds of insurance made available from companies in India are home insurance, travel cover, personal accident insurance, and business insurance.