General Insurance flashcards

A new Beginner's Guide to Insurance

Obtaining 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 know what it is or why one must have it. For many Indians insurance is a form of investment or a superb tax saving avenue. Ask a typical person about his or her investments and they will proudly mention an insurance product as part of their core investments. Associated with the approximately 5% of Indians that are covered by insurance 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 witnessed such rampant mis. Promoting at the hands of agents who are over enthusiastic to offer products connecting insurance to investment making them fat commissions. General Insurance flashcards

What is Insurance?

Insurance is a way of distributing out significant financial risk of a person or business entity. To a huge group of individuals or business entities in the occurrence of an unfortunate event that is predetermined. The cost of being insured is the month to month or twelve-monthly compensation paid to the company. Inside the purest form of insurance if the predefined event does not occur until the period specified the amount of money paid as settlement is not retrieved. Insurance is effectively a means of spreading risk among a pool of folks who are insured and lighten up their financial burden in the event of a shock.

Types of Insurance coverage

Potentially any risk that can be quantified in conditions involving can be insured. To protect loved ones from loss of income due to immature death one can have a life insurance policy policy. To safeguard yourself and your family against unforeseen medical expenses you can opt for a Mediclaim policy. To guard your vehicle against robbery or destruction in accidents you can have a motor insurance policy. To protect your home against fraud, damage due to fire, flood and other challenges you can find dating a home insurance.

Most popular insurance types in India are life insurance, health insurance and motor insurance. Apart from these there are other forms as well which are discussed in brief in the following paragraphs. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).

Life Insurance

This form of insurance provides cover against financial danger in the event of premature death of the insured. There are twenty four life insurance companies actively playing in this arena of which Life Insurance Corporation of India is a public sector company. There are several kinds of life insurance coverage policies the simplest form of which is expression plan. The other complicated 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 companies in India of which 4 namely National Insurance Organization Ltd. New India Assurance Company Ltd, Oriental Insurance coverage Company Ltd and United India Insurance provider Ltd are in the public industry domain.

The biggest cake of non-life insurance in conditions of premiums underwritten is shared by engine insurance followed by executive insurance and health insurance policy. Other kinds of insurance proposed by companies in India are home insurance, travel cover, personal accident insurance, and business insurance.