Life Insurance knowledge base

A Beginner's Guide to Insurance policy

Getting 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 understand what it is or why one must have it. For most Indians insurance policy is a form of investment or a superb tax saving avenue. Ask a typical 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 much 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 to offer products backlinking insurance to investment making them fat commissions. Life Insurance knowledge base

Exactly what is Insurance?

Insurance is a way of growing out significant financial chance of a person or business entity. To a huge 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 total annual compensation paid to the company. In the purest form of insurance if the predetermined event does not happen until the period specific the cash paid as payment is not retrieved. Insurance policy is effectively a means of spreading risk among a pool of men and women who are insured and brighten their financial burden in the event of a shock.

Types of Insurance coverage

[caption id="attachment_14367" align="alignleft" width="300"] insurance word on business folder showing risk management concept[/caption] Potentially any risk that can be quantified in conditions of money can be insured. To guard loved ones from reduction 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 damage in accidents you could have a motor insurance policy. To protect your home against theft, damage due to open fire, flood and other challenges you can find dating a home insurance coverage.

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 brief 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 chance in the event of premature death of the insured. There are twenty four life insurance companies playing in this arena of which Insurance coverage Corporation of India is a open public sector company. There are several types 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 policy Company Ltd and United India Insurance carrier Ltd are in the public field domain.

The biggest cake of non-life insurance in conditions of premiums underwritten is shared by engine insurance followed by engineering insurance and health insurance coverage. Other types of insurance made available from companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.