A person’s life and property are surrounded by risks of death, disability or destruction. These risks can result in financial losses. Insurance is a smart way to transfer such risks to the insurance company. Insurance transfers all the risks to the company, and if you have taken the insurance, you are paid in lieu of those risks. Read this entire article to get more information about insurance.
What is insurance?
In technical terms, it is a form of risk management in which an insured entity transfers the cost of a potential loss to another entity in exchange for a small monetary compensation.
This compensation is called premium. Simply put, it is like paying a lump sum to an entity to protect itself from possible future losses. Thus, when something unfortunate happens, the insurer helps you cope with the situation. Must know Insurance meaning and types.
Why do we need insurance?
There can be many reasons why you may need help, such as serious illness, natural calamity, unexpected death of loved ones, etc. In such situations, getting adequately insured goes a long way to help your financial situation. Thus, one should choose the right type of security according to their needs.
If you want to buy an Insurance policy, then know this new rule
The new year 2023 has brought many changes with regards to insurance policies. The effect of which will be seen on people’s lives throughout the year. Many rules have changed regarding banking rules and buying insurance.
From January 1, customers will have to compulsorily provide KYC (Insurance KYC New Rules) documents to purchase insurance policies. In which KYC documents have been made mandatory for purchase of life insurance, general and health insurance.
If you are planning to take new insurance policy in 2023 new year then apply with KYC documents. Till now it was not mandatory to provide KYC documents while buying an Insurance policy. But, from now i.e. from 1 January 2023 insurance companies will have to compulsorily collect KYC documents from customers.
Importance of insurance
The benefit of insurance is that it protects your savings in case of unforeseen expenses. It is mandatory for vehicle owners to purchase a vehicle insurance policy.
There are many insurance options available to you to ensure the safety of you, your business, your employees and your customers. Whether the insurance is life insurance, health insurance or general insurance, you can buy insurance policies offline as well as online. Just as there are insurance agents who will help you buy a policy, there are also websites from which you can buy a policy.
A combined plan of various types of insurances like property, liability, crime coverage, commonly called BOP. So, BOP can also get you customized insurance for your business as per your needs.
Type of insurance
There are many types of friends insurance, here we have discussed its types in detail.
1. Life insurance
You buy life insurance to ensure that your dependents are financially protected in the event of your untimely demise. Life insurance is especially important if you are the sole breadwinner for your family or if your family is highly dependent on your income.
Life cover is one of the traditional forms of insurance, designed to protect you and your loved ones against an accidental calamity or calamity. It was initially designed to protect the income of families. But since then, it has evolved from just a safeguard to an asset protection option or tax planning.
The need for life insurance is calculated on various factors such as number of dependents, current savings, financial goals etc.
You must have heard the name Life Insurance Corporation of India (LIC) because LIC is the oldest government insurance company in India. LIC offers life insurance under many schemes, apart from this there are many other companies available in the market for life insurance, each with different life insurance schemes.
As to which plan you should take life insurance under, you should consult an insurance agent, who can advise you about the best life insurance plans as per the current plans and your budget.
Life insurance is a type of savings where a person takes life insurance, in case of his death due to an accident, the insurance company gives some amount or premium to his family members.
Life insurance covers the following planes.
1. Term Insurance
This is a life protection insurance policy plan, under which, if an insured dies due to any accident during the policy period, then a term insurance policy plan has to be taken to cover him, the benefits of this plan after the death of the insured person. Meets his family.
2. Whole life insurance
To get whole life insurance, you have to take life coverage, in this insurance policy the premium is always paid on time, so the insurance contract can be used to benefit the family of the person even after his death.
3. Endowment Policy
Under this scheme, a small amount is taken from you on weekly, monthly and daily basis but it is returned after the expiry of the policy. Endowment is used as security for availing insurance and endowment loans.
4. Money Back or Cash Bank Scheme
It is a scheme under which certain percentage of amount is returned to the insurance company from time to time, after the expiry of the insurance period, the amount deposited by the insured is given as maturity withholding the amount paid from time to time. It covers life insurance risks.
5. Policy for Children
Under this policy, there is a policy taken by the parents for the children, in which the expenses start increasing gradually with the age of the children to meet the same expenses and the policy is used to cover the expenses.
2. General Insurance
Any type of coverage other than life comes under this category. There are many different types of insurance that cover almost every aspect of your life depending on your needs:
Health insurance
Health insurance covers your medical and surgical expenses that may arise during your lifetime. Generally, health insurance provides cashless facility in empaneled hospitals. After the corona crisis, the awareness of health insurance has increased among people and more and more people are getting health insurance. Health insurance provides you with the right health services during difficult times.
While taking health insurance, keep in mind that a policy should be taken that covers all expenses incurred during treatment. The more coverage the policy has, the more the policy will help you in bad times.
Hence taking health insurance is a responsible first step to protect the family. It is important to have the necessary documents ready in advance to make the process of buying health insurance smooth.
Travel insurance
It protects you against emergencies or damages that may occur during your journey. It covers you against unforeseen medical emergencies, theft or loss of belongings etc. Travel insurance should be taken by a person who is always going abroad for travel, under travel insurance, if you suffer any kind of loss during travel, the insurance company covers and compensates the insured person in case of loss of luggage due to injury. .
In this scheme, financial assistance is provided in case of accident, loss or theft of luggage, death or travel delay. The company offers foreign travel insurance plans to tourists traveling abroad. In this plan, you will get cover from this insurance if passport or any document is lost, plane is hijacked, any accident or health issue occurs. If you travel with your family on multiple trips abroad or within the country, then if you take family travel insurance, your entire family will be covered with you. In this insurance plan, every member gets cover in case of accident, illness or flight cancellation or any other inconvenience during travel.
In case of emergency, after mailing the documents to the company, contact the customer care number of the company. If you are located outside the country, you will be provided with the contact number of the local office or agent in that country. You can immediately ask them for help. After this you enter all the documents along with your problem and cost details.
Vehicle insurance
Vehicle insurance is also known as motor insurance or vehicle insurance. This type of insurance covers all types of vehicles including private vehicles, four wheelers and two wheelers and commercial vehicles etc.
Vehicle insurance provides you with financial assistance in case of an accident with your vehicle, theft or other loss of your vehicle. If you suffer any kind of injury during a vehicle accident, it is also covered under this insurance.
Types of Vehicle Insurance:
Two wheeler insurance
It is clear from the name of this insurance that this insurance is for two wheelers. Like scooter, bike, scooty etc. This insurance covers any damage caused to the two wheeler drivers. While buying a new 2 wheeler vehicle it is up to you to take a package policy or a third party policy.
Car insurance
This insurance is for private cars. It is also called four wheeler insurance. Car insurance In case of an accident in your car, under this insurance, the damage caused to your car, the car driver and any third party is covered. Under the Indian Motor Vehicle Act, if a person buys a new car or four wheeler, he is required to take third party insurance for 3 years.
Commercial vehicle insurance
Commercial vehicle insurance is clear from the name itself that this type of insurance is for commercial vehicles. This insurance is designed for traders who have more than one vehicle to run their business. Which is used to carry goods or passengers from one place to another.
In this type of insurance, more than one vehicle is insured. This insurance provides compensation if the vehicle is stolen or damaged in an accident. Along with this, it also compensates the loss caused by the third party in the vehicular accident.
Home Insurance
We all dream of owning our own home. Home insurance can help cover loss or damage to your home due to accidents such as fire and other natural disasters or hazards. Home insurance covers other eventualities like lightning, earthquake etc.. It covers the house and/or its contents depending on the scope of the policy.
Home insurance is an insurance cover for a housing unit that provides financial protection to the physical structure of the house and belongings against any physical damage caused by unforeseen events including natural calamities like earthquakes, floods, cyclones, etc.; Also man-made calamities like fire, theft, accident, riot, terrorist activity etc.
Anyone who owns a home should take out home insurance to protect his/her finances during any unforeseen events, whether he/she is an owner (landlord) or a tenant.
It is a common misconception that only homeowners can take out home insurance. Home insurance is beneficial for both the owner and the tenant. While an owner can only take cover for the structure of the house, a tenant can take cover for all the items in the house, which belong to him/her, not the landlord.
Commercial Insurance
When you buy an insurance policy, you must check the premium and coverage. These should be according to your needs. Commercial insurance provides solutions for all sectors of industry like construction, automotive, food, power, technology etc. Risk protection requirements may vary from person to person but the basic functioning of an insurance policy remains more or less the same.
Benefits of Insurance
Insurance plays an important role in our life. Be it life insurance policy, or motor insurance, having insurance coverage helps us financially at different stages of our life. Similarly talking about general insurance it provides financial security in a way, in this we can insure anything because today nothing is worth trusting, any accident can happen anytime, with this simple insurance We can get protection against any future problem, loss due to accident.
Under Section 80D, you can claim medical insurance premium of up to Rs 25,000 for yourself and family and an additional Rs 25,000 for parents. If the insured is a senior citizen, the deduction limit increases to Rs 50,000.
With the help of insurance, you can manage the loans. You can repay personal loan, car loan, home loan etc. Life insurance can be helpful for fulfilling your long term goals. With their help, you can realize your plans related to your retirement or children’s education.
Conclusion
There are many ways to get insurance, such as getting insurance from an insurance agent of an affiliated insurance company, getting insurance by going to the insurance company itself, getting insurance online from the insurance company’s website, getting insurance by registering on an online broker’s website, etc.