Life Insurance exam

A Beginner's Guide to Insurance

Getting the right kind of insurance is central to sound financial planning. Some of us may have some form of insurance but very few really determine what it is or why one must have it. For the majority of Indians insurance coverage is a form of investment or a superb tax saving avenue. Inquire the average person about his/her investments and they will proudly mention an insurance product as part of their core investments. Of 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. Selling at the hands of agents who are over enthusiastic in selling products linking insurance to investment earning them fat commissions. Life Insurance exam

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 regrettable event that is predetermined. The cost of being insured is the month to month or total annual compensation paid to the insurance company. Within the purest form of insurance if the predefined event does not take place until the period specified the cash paid as settlement is not retrieved. Insurance coverage is effectively a means of spreading risk among a pool of individuals who are insured and lighten up their financial burden in the event of a shock.

Types of Insurance policy

Potentially any risk that can be quantified in conditions pounds can be insured. To protect loved ones from damage of income due to immature death one can have a life insurance policy. To guard 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 might have a motor insurance policy. To safeguard your home against fraud, damage due to open fire, flood and other perils you can find dating a home insurance policy.

Most popular insurance forms 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 sentences. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).

Life Insurance

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 enjoying in this arena of which Insurance coverage Corporation of India is a open public sector company. There are several varieties of life insurance policy 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 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 sector domain.

The biggest curry of non-life insurance in conditions of premiums underwritten is shared by motor insurance followed by architectural insurance and health insurance. Other kinds of insurance provided by companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.