What is insurance?
Insurance refers to a mutual agreement or a policy that an individual purchases from an insurance company by paying premiums on yearly, monthly or quarterly basis to the insurance company. In return, the insurance company protects the buyer or the policyholder from any kind of loss or risk that may occur in the future.
Apart from individuals, both public and private sector organization can purchase insurance to protect their employees. It's basically a kind risk management scheme by using which the insured person can get protection against possible eventualities such as loss, sickness, death, loss done to his/her belongings etc.
Insurance is the only financial instrument that helps you manage your financial risks smoothly and reduces your financial worries.
Types of Insurance in India
There are different types of issuance available in India. Listed below are the major types:
Life Insurance: It is kind of shared bond between an insured individual and an insurance company wherein you pay a certain amount of money as premiums on monthly, yearly or quarterly basis to an insurance company. The insurance company, in return, protects you against future eventualities such as loss or damage done to you, your family members and property. There are different life insurance plans available in India offered by both private and public life insurance companies to help you meet your different financial needs at different junctures of life. The sum assured received from life insurance plans can be used for fulfilling a variety of tasks such security after retirement, protection against health care cost. Life insurance policies not offer risk coverage, you can also borrow money against certain policies. These policies come with a lot of benefits such as death benefits, maturity benefits and tax benefits. Life insurance plans in India normally fall under two major categories namely “Whole Life Insurance Plan” and “Term Life Insurance Plan”.
Health Insurance : Another type of insurance available in India is Health insurance. It gives you protection you against the medical costs incurred in hospitalization due to illness or accident, nursing care, surgeries, consultation, diagnostic tests, ambulance service, hospital accommodation, medical bills etc. The only thing you have to do to avail these benefits is to purchase a health insurance policy by paying a certain amount of premium to your insurance provider periodically. The insurance provider will take the complete responsibility of protecting you against the cost involved in medical treatment. Certain health insurance policies also pay for regular medical checkups.
Home Insurance : Like they say, ‘home is where the heart is’, which equates to the fact that ensuring the safety of your cherished home ascertains the safety and happiness of you and your loved ones. Home Insurance policies are thus, an important investment. Providing you round the clock protection against financial liabilities arising from damage incurred by your house and/or its contents, a good home insurance policy is the cautious home owner’s best friend. Almost all Indian insurers’ offer this product, and the same can be easily purchased online.