Life Insurance settlement

A new 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 policy 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. 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 linking insurance to investment generating them fat commissions. Life Insurance settlement

Exactly what is Insurance?

Insurance is a way of distributing out significant financial risk of a person or business entity. To a huge group of individuals or business entities in the occurrence of an unfortunate event that is predetermined. The cost of being insured is the monthly or total annual compensation paid to the insurance company. In the purest form of insurance if the predetermined event does not take place until the period particular the money paid as settlement is not retrieved. Insurance coverage 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 coverage

Potentially any risk which can be quantified in conditions of money can be insured. To guard loved ones from loss 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 could have a motor insurance policy. To guard your home against robbery, damage due to open fire, flood and other challenges you can choose 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).

Life insurance coverage

This form of insurance provides cover against financial chance in the event of premature death of the insured. There are twenty four life insurance companies enjoying in this arena of which Life insurance coverage Corporation of India is a public sector company. There are several varieties of life insurance coverage policies the simplest form of which is expression plan. The other complex 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 Business Ltd. New India Assurance Company Ltd, Oriental Insurance Company Ltd and Combined India Insurance provider Ltd are in the public industry domain.

The biggest pie 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 proposed by companies in India are home insurance, travel insurance, personal accident insurance, and business insurance.