A new Beginner's Guide to Insurance
Getting the right kind of insurance is central to sound financial planning. Several of us may have some form of insurance but very few really determine what it is or why one must have it. For most Indians insurance is a form of investment or a superb tax saving avenue. Ask the average 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 significantly lower. Very few of the insured view insurance as purely that. There is perhaps no other financial product that has witnessed such rampant mis. Selling at the hands of agents who are over enthusiastic to offer products backlinking insurance to investment generating them fat commissions. General Insurance usaJust what is Insurance?
Insurance is a way of spreading out significant financial chance of a person or business entity. To a sizable group of individuals or business entities in the occurrence of an unfortunate event that is predefined. The cost of being insured is the month-to-month or twelve-monthly compensation paid to the insurance company. Within the purest form of insurance if the predefined event does not occur until the period specified the cash paid as settlement is not retrieved. Insurance policy is effectively a means of spreading risk among a pool of individuals who are insured and brighten their financial burden in the event of a shock.
Types of Insurance policy
[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 of money can be insured. To guard loved ones from damage of income due to immature death one can have a life insurance coverage policy. To safeguard yourself and your family against unexpected medical expenses you can opt for a Mediclaim policy. To guard your vehicle against robbery or harm in accidents you could have a motor insurance policy. To guard your home against robbery, damage due to open fire, flood and other perils you can find dating a home insurance policy.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 short in the following paragraphs. 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 danger in the event of premature death of the insured. There are 24 life insurance companies actively playing in this arena of which Life Insurance Corporation of India is a general public sector company. There are several varieties of life insurance policy policies the simplest form of which is term plan. The other complex policies are endowment plan, whole life plan, money back plan, ULIPs and annuities.
General Insurance
All other insurance policies besides Life Insurance fall under General Insurance. There are 24 general insurance firms in India of which 4 namely National Insurance Company Ltd. New India Assurance Company Ltd, Oriental Insurance Company Ltd and Usa India Insurance provider Ltd are in the public sector domain.
The biggest curry of non-life insurance in conditions of premiums underwritten is shared by electric motor insurance followed by engineering insurance and health insurance coverage. Other varieties of insurance proposed by companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.