You can build your Insurance portfolio by purchasing various insurance policies like Health Insurance,Life Insurance,Term Insurance & Vehicle Insurance with us.
What is Insurance?
Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to protect against the risk of a unsure or uncertain loss. An entity or company which provides insurance is known as an insurer/insurance company/insurance carrier or underwriter.
The amount of money charged by the insurer to the policy holder for the coverage set forth in the insurance policy is called the premium. The pre-decided amount that the insurance company pays to the policy holder when the insured event takes place is called sum assured.Sum insured is the maximum value for a year that your Insurance Company can pay in case you are hospitalized. So, from the above we can understand sum assured & sum insured are almost same things but used in two different places.
Type of Insurance:-There are many type of Insurance available in market but main useful 6 type of Insurance are as follows-
1. Life insurance
2. Health insurance
3. Disability insurance
4. Auto insurance
5. Home insurance
6. Travel insurance
Those are the six main insurance products that you should take into consideration when planning your financial future.
1. Life insurance:
Here’s a brief guide to different types of life insurance policies. Know the various life insurance plans to select the right one at the right time.
Broadly speaking, life insurance can be further categorized as a pure risk coverage plan – purely insurance and the other, which is a combination of insurance and investment component. But, maybe you are not sure which plan to opt for. Or maybe you need to know the different types of life insurance policies available in the market to make a wise choice!
Different Types of Life Insurance Policies in India
A.Term Plan – pure risk cover
B. Unit linked insurance plan (ULIP) – Insurance + Investment opportunity
C. Endowment Plan – Insurance + Savings
D. Money Back – Periodic returns with insurance cover
E. Whole Life Insurance – Life coverage to the life assured for whole life
F. Child’s Plan – For fulfilling your child’s life goals like education, marriage, etc.
G. Retirement Plan – Plan your retirement and retire gracefully.
Let’s dive deeper to know each plan in detail.
A. Term Plan is the simplest form of life insurance plan. Easy to understand and affordable to buy.
A term insurance provides death risk cover for a specified period. In case the life assured passes away during the policy period, the life insurance company pays the death benefit to the nominee. It is a pure risk cover plan that offers high coverage at low premiums.
There’s an option to add riders to widen up the coverage.
The death benefit is payable as lump sum, monthly payouts, or a combination of both.
There’s no payout if the life assured outlives the policy term. However, these days there are companies offering Term Plans with Return of Premiums (TROPS), where insurance companies payback all the paid premium amount in case the life assured outlives the term period. But, such plans are costlier than the vanilla term insurance plan.
Best known for: High sum assured (coverage) at a low premium.
Benefit of Term Plan:
In case of an untimely death of the breadwinner, family is supported with an enormous amount of money – sum assured, which helps them to replace the loss of the income caused due to the breadwinner’s death. Moreover, the money could be utilized to pay off loan, monthly household expenses, child’s education, child’s marriage, etc.
B. Unit Linked Plans (ULIPs):-
A unit linked plan is a comprehensive combination of insurance and investment. The premium paid towards ULIP is partly used as a risk cover (insurance) and partly is invested in funds. One can invest in different funds offered by the insurance company depending on his risk appetite. The insurance company then invests the accumulated amount in the capital market i.e. in bonds, equities, debts, market funds, or a hybrid funds…
Best known for: Long-term investment option with much more flexibility to invest.
Benefit of ULIP:
Invest money as per your risk appetite. You have the option to invest either in equity, debt or in hybrid funds through the life insurance company with complete transparency.
C. Endowment Plans:
Endowment plan is another type of life insurance plan, which is a combination of insurance and saving.
A certain amount is kept for life cover – insurance, while the rest is invested by the life insurance company. In an endowment plan, if the life assured outlives the policy term, the insurance company offers him the maturity benefit. Moreover, Endowment Plans may offer bonuses periodically, which are paid either on maturity or to the nominee under death claim. On death, the death benefit is payable to the nominee.
Endowment plans are also commonly known as traditional life insurance, although, there is an investment component but the risk is lower than the other investment products and so are the returns.
Best known for: Long-term saving option for people with much lower risk appetite for investment.
Benefit of Endowment Plan:
Long-term financial planning and an opportunity to earn returns on maturity.
D. Money Back Life Insurance:-
Money back plan is a unique type of life insurance policy, wherein a percentage of the sum assured is paid back to the insured on periodic intervals as survival benefit.
Money back plans are also eligible to receive the bonuses declared by the company from time to time. This way, policyholder can meet short-term financial goals.
Best known for: Short-term investment product to meet short-term financial goals.
Benefit of Money Back Plan:
Short-term financial planning and an opportunity to earn returns on maturity.
E. Whole Life Insurance:-
A whole life insurance policy covers the life assured for whole life, or in some cases, up to the age of 100 years. Unlike, term plans, which are for a specified term.
The sum assured or the coverage is decided at the time of policy purchase and is paid to the nominee at the time of death claim of the life assured along with bonuses if any.
However, if the life assured outlives the age of 100 years, the insurance company pays the matured endowment coverage to the life insured.
The premiums are higher as compared to term plans. Whole life insurance plans also offer partial withdrawals after completion of premium payment term.
Best known for: Life coverage for whole life.
Benefit of Whole Life Plan: Lifelong protection to the insured and an opportunity to leave behind a legacy for heirs.
F. Child Plan:-
Child plan helps to build corpus for child’s future growth. Child plans help to build funds for child’s education and marriage. Most of the Child Plan provides annual installments or one time payout after the age of 18 years.
In case of an unfortunate event, the insured parent passes away during the policy term – immediate payment is payable by the insurance company. Some child plans waive off the future premiums on death of the life insured and the policy continues till maturity.
Best known for: Building funds for your child’s future.
Benefit of Child Plan: Helps in fulfilling your child’s dream.
G. Retirement Plan:-
Retirement plan helps to build corpus for your retirement. Helping you to live independently financially and without worries. Most of the child plans provide annual installments or one time payout after the age of 60 years.
In case of an unfortunate event, life assured passes away during the policy term – immediate payment is payable to the nominee by the insurance company. Death benefit will be higher of coverage or fund value or 105% of premiums paid. Vesting Benefit will be payable if the life assured survives the maturity age. In which case, payout will be fund value which has to be utilized for buying an annuity. Best known for: Long-term savings and retirement planning.
Benefit of Retirement Plan: Helps in building corpus for retirement.
This is just a simplified guide to different types of life insurance policies.
2. Health insurance
Health insurance is a type of insurance coverage that pays your medical, surgical, and sometimes dental expenses. The main purpose of health insurance is to receive the best medical care without any strain on your finances.
Health insurance plans offer protection against high medical costs. It covers hospitalization expenses, day care procedures, domiciliary expenses, and ambulance charges, besides many others.
Types of Health Insurance Policies
There are different kinds of health insurance policies that are available in India. These policies cover all the expenses in any kind of medical emergency. They are as follows:
1- Individual Health Insurance Policy:
Individual health insurance policy provides coverage to the person insured against different kinds of ailments. It also covers the other benefits as mentioned above.
2- Family Floater Health Insurance Policy:
The entire family is insured under this insurance policy. The family floater plan offers the individual members of a family with a fixed amount of health insurance. This type of plain can either be availed either for the treatment of an individual or a sum total for the treatment of an individual member of the family.
3- Pre-existing Disease Cover Policy:
Under this plan, the policyholder will get a cover for all those diseases he had before purchasing the health insurance plan.
4- Surgical and Critical Illness Plan:
This plan provides coverage against critical diseases such as cancer, heart attack etc.
5- Senior Citizen Health Insurance Policy:
All the health-related issues in old age are covered under this policy.
6- Preventative Healthcare Policy:
This policy covers the medical check-ups and related expenses such as consultation fee, concessions in tests fee, etc.
There are different kinds of health insurance policies that are available in India. These policies cover all the expenses in any kind of medical emergency. They are as follows:
1- Individual Health Insurance Policy:
Individual health insurance policy provides coverage to the person insured against different kinds of ailments. It also covers the other benefits as mentioned above.
2- Family Floater Health Insurance Policy:
The entire family is insured under this insurance policy. The family floater plan offers the individual members of a family with a fixed amount of health insurance. This type of plain can either be availed either for the treatment of an individual or a sum total for the treatment of an individual member of the family.
3- Pre-existing Disease Cover Policy:
Under this plan, the policyholder will get a cover for all those diseases he had before purchasing the health insurance plan.
4- Surgical and Critical Illness Plan:
This plan provides coverage against critical diseases such as cancer, heart attack etc.
5- Senior Citizen Health Insurance Policy:
All the health-related issues in old age are covered under this policy.
6- Preventative Healthcare Policy:
This policy covers the medical check-ups and related expenses such as consultation fee, concessions in tests fee, etc.
- Disability insurance:
Disability insurance provides risk coverage for the lost income due to failure to work in case of any permanent or temporary disability. This kind of insurance helps in providing a part of your lost income along with the medical expenses, if you happened to meet with an accident that led to disability.
There are many types of organizations that provide different types of disability insurance. Each organization and disability insurance type have specific rules as to what constitutes a disability and how a person might qualify to receive the disability benefit. This basic insurance is a key social justice concept.
Types of Disability Insurance:-
There are two basic types of disability insurance. Those are discuss below-
1. Short term disability insurance policies offer a worker a portion of their salary if they are unable to work for a short period—typically three to six months.
2. Long term disability insurance offers a worker a portion of their salary if they are unable to work for a longer period—typically a period of over six months.
Both short term and long term disability policies have a period that a person must be disabled for before that individual is able to start receiving disability benefits. That period of time is called an elimination period. If a person becomes disabled, they must wait until the elimination period is over before they start receiving benefits. If they are able to work before the elimination period is over, the person will not receive a benefit.
The Social Security Administration also provides disability insurance. Employees who’ve paid the Federal Insurance Contributions Act (FICA) tax for a certain amount of time, are eligible to receive the Social Security disability income insurance if they meet the strict requirements of disability under the OASDI program.
3. Auto insurance
Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.
Auto insurance provides coverage for:
Property – such as damage to or theft of your car.
Liability – your legal responsibility to others for bodily injury or property damage.
Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
4. Home insurance:-
Homeowners insurance is a form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.