Guide well Insurance

A 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 coverage but very few really know what it is or why one must have it. For many Indians insurance coverage is a form of investment or a superb tax saving avenue. Inquire a typical person about his/her investments and they will proudly mention an insurance coverage product as part of their core investments. Of the approximately 5% of Indians that are covered 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 observed such rampant mis. Promoting at the hands of agents who are over enthusiastic in selling products linking insurance to investment generating them fat commissions. Guide well Insurance

What is Insurance?

Insurance is a way of growing out significant financial risk of a person or business entity. To a sizable 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 gross annual compensation paid to the company. Within the purest form of insurance if the predetermined event does not happen until the period particular the money paid as compensation 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

[caption id="attachment_14367" align="alignleft" width="300"] insurance word on business folder showing risk management concept[/caption] Potentially any risk that may be quantified in conditions involving can be insured. To safeguard loved ones from damage of income due to immature death one can have a life insurance policy. To protect yourself and your family against unexpected medical expenses you can opt for a Mediclaim policy. To safeguard your vehicle against robbery or harm in accidents you can have a motor insurance policy. To guard your home against theft, damage due to fireplace, flood and other perils you can choose 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 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 risk in the event of premature death of the insured. There are 24 life insurance companies playing in this arena of which Life Insurance Corporation of India is a general public sector company. There are several kinds of life insurance policies the simplest form of which is term plan. The other complicated 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 providers in India of which 4 namely National Insurance Organization Ltd. New India Assurance Company Ltd, Oriental Insurance coverage Company Ltd and Usa India Insurance provider Ltd are in the public field domain.

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