A new Beginner's Guide to Insurance policy
Getting the right kind of insurance is central to sound financial planning. Several of us may have some form of insurance 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. Request an 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 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. Selling at the hands of agents who are over enthusiastic in selling products backlinking insurance to investment generating them fat commissions. Life Insurance of india policy statusExactly what is Insurance?
Insurance is a way of spreading out significant financial risk of a person or business entity. To a sizable group of individuals or business entities in the occurrence of an regrettable event that is predefined. 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 predefined event does not happen until the period specified the 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 lighten their financial burden in the event of a shock.
Types of Insurance policy
[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 guard loved ones from damage of income due to immature death one can have a life insurance policy. To protect yourself and your family against unforeseen 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 guard your home against robbery, damage due to fire, flood and other perils you can find dating 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 brief 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 danger 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 open public sector company. There are several types of life insurance coverage policies the simplest form of which is term plan. The other intricate 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 firms in India of which 4 namely National Insurance Company Ltd. New India Guarantee Company Ltd, Oriental Insurance Company Ltd and Usa India Insurance Company Ltd are in the public sector domain.
The biggest pie of non-life insurance in conditions of premiums underwritten is shared by motor insurance followed by engineering insurance and health insurance. Other kinds of insurance provided by companies in India are home insurance, travel cover, personal accident insurance, and business insurance.