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It is important for an Individual to Understand the basic types of Insurance in India
Insurance has become a Financial support for humans & materials we use in our daily life, we can call it Liabilities. You have noticed that whenever you purchase High-Value products like Mobile (to give a closer illustration of insurance), they offer you insurance. This insurance helps you secure your spending on mobile in case of Damage & Thefts. Now, even you can insure your spectacles when you purchase from a few brands! Let’s understand more about the basic types of Insurance that are essentially required in India based on their lifestyle.
What is Insurance?
Insurance refers to a contractual arrangement in which one party, i.e. insurance company or the insurer, agrees to compensate the loss or damage sustained to another party, i.e. the insured, by paying a definite amount, in exchange for an adequate consideration called a premium.
The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insurer will compensate the insured.
Why do you need Insurance?
You need insurance for various reasons. When we list a few important reasons, they are mainly to recover your spending or investment by unusual situations that incur in the loss of money. At that time you can claim insurance to get back paid money (Fully or partially – depending on the type of insurance purchased). The other reason is not to spend money in some cases of emergencies like health treatments. So, understand better to make a wise insurance plan that secures you in many ways!
Types of Insurance Available in India
Below listed are the basic types of Insurance that are available in India
1. General Insurance
General Insurance is a contract between the insurer & insurance provider offering an assured sum in case of any damage or loss other than life. You can insure any of your assets against liabilities like a vehicle, home, business, health, travel & similar. There are different kinds of general insurance that offer you protection against damage, loss, or theft.
Types of General Insurance –
Below listed are the types of general insurance available in India.
- Health Insurance
- Home Insurance
- Travel Insurance
- Motor Insurance
- Fire insurance
2. Life Insurance
Life insurance is a contract between insurers & insurance providers to offer an assured sum of money in exchange for insurance premiums upon the death of the insurer or after an agreed period of time. Some companies provide attractive life insurance options that are helpful for different classes of people to secure their future & their families too!
Types of Life Insurance –
Below listed are the types of Life insurance available in India.
- Term Life Insurance
- Whole Life Insurance
- Endowment Plans
- Pension Plans
- Unit Linked Insurance Plan (ULIP)
- Child Plans
Plan your insurance today!
Expert guidance under Finvest Consultants
Going Through All Types of General Insurance
Health Insurance
Health insurance is a contract that funds your medical expenses in various stages, where you can safeguard your personal savings while you avail of high-class medical facilities. Insurance providers offer this facility to you & your family where you cannot deprive of availing all sorts of medical expenses prior to post-hospitalization.
Health insurance covers –
- Hospitalization
- Critical Illness Treatment
- Medical bills prior to post hospitalization
- Daycare procedures
7 Types of Health Insurance available in India
- Individual Health Insurance – This type of health insurance covers medical expenses for just one policyholder.
- Family Floater Insurance Plan – This type of health insurance covers medical expenses for your family commonly including you, your spouse & 2 kids.
- Critical Illness Coverage Plan – This insurance provides coverage for critical or chronic diseases like heart attack, cancer, kidney failure, stroke & other similar intense diseases. Here you get a lumpsum amount when you are diagnosed with the disease, unlike other health insurance.
- Senior Citizen Health Insurance – This type of health insurance is provided especially for people aged above 60.
- Group Health Insurance – This type of insurance is specially designed for employers to offer health insurance benefits to their employees. Here employers can remove older beneficiaries & can add new beneficiaries to enjoy this benefit.
- Maternity Health Insurance – This insurance covers all medical expenses during Pre-Natal, Post-Natal & delivery stages. This covers the mother & new born baby too. Newly married couple are major beneficiaries of this health insurance. Contact your insurance advisor to know more about this.
- Personal Accident Insurance – This insurance covers only for injuries, disability or loss of life only in accidents.
Home Insurance
Home insurance provides protection against any theft, destruction, damage, burglary, or fire to your home. The damage to the house can be caused by natural disasters, man-made or other threats.
Types of Home Insurance available in India
- Home Structure or Building Insurance – Protects the structure of your house during any damage caused to your property.
- Public Liability Coverage – This is coverage for third parties or guests who got damaged by the insurer’s property.
- Standard Fire & Special perils Policy – This covers any damage or destruction caused due to natural calamities like earthquakes, tornadoes, Tsunami, Landslides, Floods, etc., or some human-made disasters like bombs explosions, strikes, etc., Property owners residing in Earthquake or flood-prone areas & areas with more terror activities can make use of this benefit efficiently.
- Content Insurance – This insurance covers any damage caused to furniture, interiors, vehicles, or appliances by riots, or natural calamities.
Travel Insurance
Travel insurance provides protection against any possible damages during your journey. It covers loss of baggage, loss of passport, flight cancellation, and personal or medical emergencies.
Types of Travel Insurance
- Domestic Travel Insurance – Covers insurance for domestic travel
- International Travel Insurance – Covers insurance for international travel
- Family Travel Insurance – Insurance coverage for the whole family during the journey
- Individual Travel Insurance – Insurance coverage for an individual. Best for solo travels.
Motor Insurance
Motor insurance is a type that covers damage caused to your vehicle in an accident, fire, or natural calamity.
Types of Motor Insurance
- Two-Wheeler Insurance – Covers damage for your 2-wheeler vehicle.
- Car Insurance – Covers damage to your cars from damage.
- Commercial Vehicle Insurance – Cover damage loss to your vehicles used for commercial purposes.
Fire Insurance
Fire insurance is a type of insurance that covers your property, business, or goods destroyed by fire activity. This insurance provides coverage to you & surrounding lives affected. If you are having property or business in fire-prone areas, you are recommended to take fire insurance with a third party to safeguard yourself along with your neighbors.
3 Types of Fire Insurance –
- Specific Insurance Policy – In case of any damage due to fire, you can claim the amount specified. This will be lesser than the true valuation of the property.
- Valued Policy – You have to first value your property & then claim in case of damage caused by a fire up to the valued amount.
- Floating policies – These cover the damage caused to property in different locations.
Plan your insurance today!
Expert guidance under Finvest Consultants
Going Through All Types of Life Insurance
Term Life Insurance
Term Life Insurance is the best insurance type to secure your family’s future. This insurance term ranges from 5 years to 30 years, available at lower premium rates offering the highest amount for death coverage. This is just simple – You start paying the premium for the agreed term & if something eventualities happen during the term of plan coverage, your family gets the sum assured monetary benefit that secures their future. Once the term expires, you cannot get the benefit of death coverage.
Whole Life Insurance
Whole Life Insurance provides you the permanent death coverage for a whole life span, up to 100 years. The whole life insurance premiums are a bit higher compared to Term Life insurance. People with stellar health history avail low premium rates, whereas people with health challenges have to pay higher premiums. If the policy matures (in case of survival beyond 100 years), you will receive a check with the cash value of the policy. It is not strange to get wondered whether this plan can mature or not! For sure many have taken benefit of this. Stay positive! The world need you…
Endowment Plans
Endowment Policies provide you with the hybrid benefits of savings & death coverage. This plan provides you death coverage over the period of the agreed term & on maturity, you will receive the lump sum amount. This creates a discipline of saving regularly, while if something unusual happens, your family is secured with the lump sum amount they receive on life-insured death. This doesn’t cover whole life, but only covers the period of the agreed term.
Pension Plans
A pension plan is a type of insurance or financial security offered by insurance companies. This is also called a Retirement plan. During your service in a company or organization, you will pay part of your salary to a corpus fund or a pool of funds that are accumulated till the age of your retirement. The amounts paid during your service for the pension pool, the amount is invested in government securities & bonds. Once you are retired, you get part of the money in the corpus accumulated as an annuity or pension at regular intervals. After the age of 60, it provides you with a monthly/quarterly/annual pension that serves your family post-retirement.
What happens to my pension plan if I quit?
If you quit, you have to forfeit your accumulated pension amount. Some insurance companies provide benefits even after quitting.
Our Finvest India experts help you with a perfect retirement plan, that secures your family post-60 years. Talk To Experts
Unit Linked Insurance Plan (ULIP)
ULIP pension plans are market-linked pension products. To be more clear, the amount invested in ULIP is invested into the equity markets which have the potential to double your wealth at the time of retirement. Also, it is to be noted that, ULIPs have a lock-in period of 5 years, which you cannot withdraw investments.
Some benefits of ULIPs
- This plan offers you an option to withdraw some part of the funds whenever you require.
- Also, you can choose to invest wherever you require based on the risk capabilities.
- You get tax benefits on the premium paid & on the returns at the time of policy maturity.
Child Plan
There is a need to plan your child’s future for marriage, education, etc., Life Insurance companies provide exclusive insurance options to secure your child’s future with great benefits. You can invest in this plan for a fixed duration & on maturity, you will receive a corpus fund that can be used for education or marriage purposes. This provides you with the option of covering the life of your kid during the insurance term. To plan your child’s future go for a Child Education Plan offered by Finvest India. This can be more helpful for better & optimized investment with help of expert guidance.
Take Expert Guidance
Choose the Correct Type of Insurance with Experts
In today’s world, there are many insurance providers with a huge number of different types of insurance. When you take out some time to think about your future & plan to invest in some insurance bonds, you sometimes run out of patience with chaos. This chaos should not lead you to choose something not relevant to you, your family & future of your family. Hence, we at Finvest India help you with proper guidance by focusing on your investment & return goals. Contact our experts, discuss your investment & make it work for you!
