amp Insurance Guide fact sheet

The Beginner's Guide to Insurance

Obtaining the right kind of insurance is central to sound financial planning. Some of us may have some form of insurance but very few really know what it is or why one must have it. For many Indians insurance coverage is a form of investment or a superb tax saving avenue. Ask the 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 witnessed such rampant mis. Selling at the hands of agents who are over enthusiastic in selling products backlinking insurance to investment earning them fat commissions. amp Insurance Guide fact sheet

Exactly what is Insurance?

Insurance is a way of spreading 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 predefined. The cost of being insured is the month-to-month or twelve-monthly compensation paid to the insurance company. Within the purest form of insurance if the predetermined event does not happen until the period particular the amount of 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

Potentially any risk that can be quantified in conditions of money can be insured. To safeguard loved ones from loss of income due to immature death one can have a life insurance coverage policy. To safeguard yourself and your family against unanticipated medical expenses you can opt for a Mediclaim policy. To safeguard your vehicle against robbery or destruction in accidents you can have a motor insurance policy. To guard your home against theft, damage due to fireplace, flood and other perils you can choose a home insurance policy.

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 quick 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 chance in the event of premature death of the insured. There are twenty four life insurance companies actively playing in this arena of which Life insurance coverage Corporation of India is a public sector company. There are several types of life insurance coverage policies the simplest form of which is phrase 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 providers in India of which 4 namely National Insurance Organization Ltd. New India Assurance Company Ltd, Oriental Insurance policy Company Ltd and Combined India Insurance Company Ltd are in the public field domain.

The biggest cake of non-life insurance in conditions of premiums underwritten is shared by electric motor insurance followed by architectural insurance and health insurance policy. Other varieties of insurance made available from companies in India are home insurance, travel cover, personal accident insurance, and business insurance.