A new Beginner's Guide to Insurance policy
Obtaining 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 or her investments and they will proudly mention an insurance policy product as part of their core investments. Associated with the approximately 5% of Indians that are covered the proportion of those adequately insured is significantly 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 earning them fat commissions. Life Insurance x factorsWhat 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 unlucky event that is predetermined. The cost of being insured is the month to month or gross annual compensation paid to the insurance company. In the purest form of insurance if the predetermined event does not happen until the period specified the cash paid as compensation is not retrieved. Insurance coverage is effectively a means of spreading risk among a pool of folks who are insured and lighten up their financial burden in the event of a shock.
Types of Insurance
[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 involving can be insured. To guard loved ones from loss of income due to immature death one can have a life insurance coverage policy. To guard yourself and your family against unforeseen medical expenses you can opt for a Mediclaim policy. To protect your vehicle against robbery or damage in accidents you could have a motor insurance policy. To safeguard your home against theft, damage due to fire, flood and other challenges you can choose a home insurance coverage.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 quick in the following paragraphs. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).
Life insurance coverage
This particular form of insurance provides cover against financial danger 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 general public sector company. There are several varieties of life insurance coverage 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
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 Guarantee Company Ltd, Oriental Insurance coverage Company Ltd and Combined India Insurance Company Ltd are in the public industry domain.
The biggest curry of non-life insurance in conditions of premiums underwritten is shared by motor insurance followed by engineering insurance and health insurance policy. Other kinds of insurance made available from companies in India are home insurance, travel cover, personal accident insurance, and business insurance.