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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 coverage but very few really determine what it is or why one must have it. For most Indians insurance coverage is a form of investment or a superb tax saving avenue. Request an average person about his or her investments and they will proudly mention an insurance policy product as part of their core investments. Associated with the approximately 5% of Indians that are insured the proportion of those adequately insured is much lower. Very few of the insured view insurance as purely that. There is perhaps no other financial product that has witnessed such rampant mis. Marketing at the hands of agents who are over enthusiastic in selling products backlinking insurance to investment generating them fat commissions. Life Insurance corporation of india payment receipt online

Exactly what is Insurance?

Insurance is a way of growing out significant financial risk of a person or business entity. To a huge group of individuals or business entities in the occurrence of an regrettable event that is predetermined. The cost of being insured is the monthly or gross annual compensation paid to the insurance company. In the purest form of insurance if the predefined event does not happen until the period particular the amount of money paid as settlement is not retrieved. Insurance coverage 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 policy

Potentially any risk which can be quantified in conditions involving can be insured. To safeguard loved ones from loss of income due to immature death one can have a life insurance policy. To guard yourself and your family against unanticipated medical expenses you can opt for a Mediclaim policy. To guard your vehicle against robbery or destruction in accidents you could have a motor insurance policy. To guard your home against robbery, damage due to open fire, flood and other challenges you can choose 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 quick in the following paragraphs. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).

Insurance coverage

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 open public sector company. There are several varieties of life insurance policy policies the simplest form of which is phrase 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 Business Ltd. New India Guarantee Company Ltd, Oriental Insurance coverage Company Ltd and Combined India Insurance Company 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 engineering insurance and health insurance policy. Other varieties of insurance proposed by companies in India are home insurance, travel cover, personal accident insurance, and business insurance.