A new Beginner's Guide to Insurance policy
Having the right kind of insurance is central to sound financial planning. A few 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 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 policy 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 observed 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 penetration in asiaWhat 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 unfortunate event that is predetermined. The cost of being insured is the month to month or twelve-monthly compensation paid to the company. In the purest form of insurance if the predefined event does not occur until the period specified the amount of money paid as compensation 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 can be quantified in conditions pounds can be insured. To safeguard loved ones from reduction of income due to immature death one can have a life insurance policy policy. To protect yourself and your family against unanticipated medical expenses you can opt for a Mediclaim policy. To safeguard your vehicle against robbery or harm in accidents you might have a motor insurance policy. To safeguard your home against fraud, damage due to fire, flood and other challenges you can choose 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 sentences. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).
Life Insurance
This particular form of insurance provides cover against financial risk 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 general public sector company. There are several types of life insurance coverage policies the simplest form of which is expression plan. The other intricate 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 firms in India of which 4 namely National Insurance Business Ltd. New India Guarantee Company Ltd, Oriental Insurance coverage Company Ltd and United India Insurance carrier Ltd are in the public sector domain.
The biggest curry of non-life insurance in conditions of premiums underwritten is shared by electric motor insurance followed by architectural insurance and health insurance coverage. Other kinds of insurance proposed by companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.