car Insurance rating Guide

A new Beginner's Guide to Insurance coverage

Getting the right kind of insurance is central to sound financial planning. Several of us may have some form of insurance coverage but very few really understand what it is or why one must have it. For most Indians insurance 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. 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 witnessed such rampant mis. Promoting at the hands of agents who are over enthusiastic in selling products linking insurance to investment earning them fat commissions. car Insurance rating Guide

Just what is Insurance?

Insurance is a way of distributing 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 predetermined. The cost of being insured is the month to month or gross annual compensation paid to the company. In the purest form of insurance if the predefined event does not happen until the period specified the amount of money paid as payment is not retrieved. Insurance coverage is effectively a means of spreading risk among a pool of individuals who are insured and lighten up their financial burden in the event of a shock.

Types of Insurance coverage

Potentially any risk that may 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. To guard yourself and your family against unanticipated medical expenses you can opt for a Mediclaim policy. To protect your vehicle against robbery or harm in accidents you can have a motor insurance policy. To guard your home against fraud, damage due to fire, flood and other perils you can choose a home insurance.

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 short in the following paragraphs. The insurance sector is regulated and monitored by IRDA (Insurance Regulatory and Development Authority).

Life Insurance

This form of insurance provides cover against financial risk in the event of premature death of the insured. There are twenty-four life insurance companies playing in this arena of which Life Insurance Corporation of India is a public sector company. There are several varieties of life insurance policy policies the simplest form of which is term 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 Organization Ltd. New India Assurance Company Ltd, Oriental Insurance policy Company Ltd and Combined India Insurance provider Ltd are in the public sector domain.

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