Introduction

we will talk about different types of insurance and I guarantee that if you read till the end, you will get all the information related to this topic. we will understand what is insurance. Discuss different life insurance policies and then talk about general insurance or different Types of Insurance.

What is Insurance?

 

what is insurance?  First of all, let’s know what is insurance? It is a legal contract between an individual or a company and an insurance company. In which, if there is any unforeseen event the insurance company gives a fixed amount to the individual

or the company in the form of financial protection. This amount is called some assured. For this financial protection, the insurance company takes a fixed amount from the individual or the company,

which is called premium. The insurance company is called the insurer and the insurer is called the insured.  And the legal contract is called the insurance policy.

Types of Insurance Policies Available

There are many types of insurance policies available in W0ELD. which can be divided into two categories. Life Insurance and General Insurance. Life Insurance includes Term Life Insurance, Unit-Linked Insurance Plans,

Whole Life Insurance, Endowment Plans, Child Plans for Education and Retirement Plans. Insurance includes Healthcare Coverage, Automobile Insurance, Homeowner’s Insurance, Insurance Against Fire, Insurance for Travel.

Now let’s see what these policies are. Term life insurance is the most basic life insurance. It is for a fixed time or term. And its premium is also fixed. The premium of this type of insurance

is the lowest. And at a low premium, you get a big insurance cover. After the passing away of the policyholder, the nominee gets the entire sum assured.

At the same time many insurance companies let you choose payout options like lump-sum, staggered and fixed monthly payout. If the policyholder lives more than the policy term, then he does not get any money on maturity.

Whole life insurance, as the name suggests, is not for a single term but for a lifetime.

Its maturity is considered at death or at 100 years. You get many options in this. As you wish, the insurance company also invests for you.

There are many types of whole life insurance policies in the market. Some only take single premium and some give full coverage on limited premium.

Most of the policies also cover life-threatening diseases. If there is no claim till maturity, many insurers return the full premium. And there are many types of options to claim .

Benefits of insurance

Insurance  companies also give you a bonus, which reduces the total expense on the premium. Keep in mind that you have to pay a fixed premium till the maturity of the policy. Such a policy gives you death benefit, maturity benefit and survival benefit.

  Endowment plans can be considered as a combination of insurance and investment. This means that there are saving plans which help you to achieve life goals and also provide insurance cover. In this, you get bonus along with death and survival benefit. However, there is no guarantee of bonus.

By giving more premium, you can include coverage of accidental death, disability, daily allowance for being admitted in the hospital, waiver for not giving premium due to disability and coverage of life-threatening diseases coverage. You can choose when and how to pay the premium.

Remember that in such plans

Remember that in such plans, your money is invested in the market, which is why endowment plans usually give higher returns.

There is a type of endowment plan, money back policy. In this, during the duration of the policy, after a pre-fixed time, the insurance company gives you a fixed amount up to the maturity of the policy.

If the policy is 25 years old, then the insurance company may give you a fixed amount every 5 years. And on maturity, you also get a bonus with the maturity benefit.

There is no guarantee of a bonus here either. If the policy holder passes before the policy is matured, then he gets a complete sum assured. The money that has been received so far cannot be reduced from the sum assured.

Now Let’s Talk About ULIP

In this, one part of your premium goes for insurance coverage and the other part is invested in the market. The purpose of this is to create capital with insurance for the policyholder.

The return of the share invested in the market depends on the performance of the funds invested. Therefore, there is no guarantee. The biggest difference between ULIP and Endowment Policy is that you can choose the investment type in ULIP.

Pension or Retirement Plan

Now, let’s talk about pension or retirement plan. Pension plans help you to accumulate corpus of funds. This can be through a lump sum investment or premiums that you pay over a period of time. Then, during retirement, you can receive regular payments from your deposited corpus.

About Child Insurance Plans

These plans pay a lump-sum amount on maturity that can be used to pay for your child’s education fee or wedding expenses.

Many people have a misconception that it insures the child’s life. This is not the case. This plan insures the life of an income-earning parent. Before coming to general insurance, Important points about Life Insurance Policies

you need to know a few things about life insurance policies. You should start your life insurance at a young age because with age, the premium starts increasing.

In addition, even if you are older, it is difficult to get insurance. As a thumb rule, one should get a life cover equal to nearly 10 to 15 times of your annual salary.

About General  And Health  Insurance. 

Now let’s talk about general insurance. What is General Insurance In which we will first discuss health insurance. Health insurance covers the expenses incurred due to medical care.

This  insurance plans either pay you the treatment amount directly or reimburse you.

Health insurance covers different medical care expenses, but mostly it covers hospitalization, treatment of critical illness, medical bills post-hospitalization, and day-care procedures.

While taking the plan, you should read carefully about exclusion, pre-existing condition, waiting period, etc. And see what is covered and what is not. You should also check if a single owner policy is suitable or a family plan. Medical tests are necessary for most policies after 50 years. That’s why you should take a health policy as soon as possible.

Motor Insurance.

The second most important general insurance is motor insurance. If you have an accident with your bike or car, motor insurance gives you financial assistance. Under Motor Vehicle Act 1988, you need to have motor insurance.

With this insurance, if your car, two-wheeler or commercial vehicle is affected by accidents, fire, landslides and natural calamities, then its payment is made by the insurance company.

About Travel Insurance.

 

Now, let’s discuss about travel insurance. As the name suggests, you should take travel insurance while traveling in India or internationally. There are many types of travel insurances.

The first is single trip insurance, in which you get a cover for a trip that runs for less than 180 days. In annual multi-trip insurance, you get a cover for every trip in a year. In foreign countries, there is student travel insurance for studies.

 About Property Insurance.

Let’s move on to property insurance.

This insurance protects your entire home and its items. Whether you are the owner of the house or a tenant.  property insurance, the insurance company compensates your home for damage caused by theft, fire, flood, earthquake and also provides financial assistance. You can take property insurance for your home, shop, or building for anyone.

Commercial Insurance Policies With Other Insurance Policies 

For the safety of the business in the market, there are commercial insurance policies and crop insurance for the safety of the crops. Similarly, for repairing your TV, mobile, fridge, and different electronic gadgets. you can take an asset insurance policy to save the expense.

You can also take pet insurance to reduce the expense of your pets’ illness and hospitalization. Guys, keep in mind that insurance not only gives you financial protection,

but you also get a tax exemption on the premium given on life and health insurance. Secondly, life insurance policies whose annual premium is more than 4185.19 dollars, you have to pay income tax on their maturity amount.

 

 Closing

This(Different Types of Insurance )tax will apply only on the policies taken after 1st April 2023. Important things to Note that, We will advise you not to take insurance policies only on the advice of an agent. Do your own research or consult an expert. Thanks for your time here