Life Insurance direct line

A Beginner's Guide to Insurance

Having the right kind of insurance is central to sound financial planning. A few 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. Request an average 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 much lower. Very few of the insured view insurance as purely that. There is perhaps no other financial product that has seen such rampant mis. Selling at the hands of agents who are over enthusiastic to offer products linking insurance to investment earning them fat commissions. Life Insurance direct line

Exactly what is Insurance?

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

Types of Insurance

Potentially any risk which can be quantified in conditions of money can be insured. To safeguard 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 unexpected medical expenses you can opt for a Mediclaim policy. To safeguard your vehicle against robbery or damage in accidents you could have a motor insurance policy. To safeguard your home against theft, damage due to fire, flood and other perils you can choose a home insurance policy.

Most popular insurance kinds 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 form of insurance provides cover against financial risk in the event of premature death of the insured. There are twenty four life insurance companies playing in this arena of which Life insurance coverage Corporation of India is a public sector company. There are several types of life insurance coverage 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

Almost 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 Organization Ltd. New India Confidence Company Ltd, Oriental Insurance coverage Company Ltd and United India Insurance Company 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 architectural insurance and health insurance policy. Other varieties of insurance made available from companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.