Having insurance is very important in today’s time. We are currently witnessing the COVID-19 pandemics in which many families lost their loved ones and some of them even lost their sole earners.
Therefore you need to secure yourself as well as your family from any kind of financial cries and you can do it through insurance. This article will discuss every type of insurance in India and try to figure out which types of insurance you should have.
What is insurance?
Insurance is the legal agreement between the individual and the insurance company. According to which insurance company promises to provide a fixed amount of coverage which is mentioned in the agreement. For the coverage, the individual has to a certain amount at regular intervals known as a premium.
Types of insurance:-
In India, insurance is broadly classified into two categories. They are as follows:-
- General insurance:-
The general insurance policies offer coverage for losses other than the death of the policyholder. This type of policy provides the policyholder with financial protection against losses due to liabilities. There are various types of general insurance they are as follows:-
- Health insurance
- Motor insurance
- Home insurance
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- Life insurance:-
The life insurance policy offer coverage against the events like death, or disabilities caused due to an accident of the policyholder. You must have life insurance so that your family does not suffer from financial problems after you. The coverage of life insurance is comparatively higher than general insurance. The different types of life insurance are as follows:-
- Term life insurance
- Whole life insurance
- Endowment insurance
- Pension plans
- Child plans
The health insurance covers the policyholder against the expenses caused due to medical care. Health insurance companies pay for the treatment of any illness or injury.
There are different types of health insurance in India, they are as follows:-
- Individual health insurance:- This kind of insurance provides coverage to only an individual.
- Family floater insurance:- It covers your entire family against any kind of illness or injury. It usually covers the husband, wife, and two children.
- Senior citizen health insurance:- You can ensure the health of all the members of your family who are above 60 years under this plan.
- Group health insurance:- This type of health insurance is offered by the employer to its employee.
- Critical illness insurance:- This type of insurance covers you against critical or life-threatening illnesses like stroke, orange failure, heart attack, cancer, etc. The policyholder gets the lump sum amount after being diagnosed with a critical illness.
- Personal accident insurance:- These types of insurance cover the policyholder against the expenses arising due to accidental injury or disability.
- Maternity health insurance:- It covers pregnant women against the expenses that arise at every stage of pregnancy. It protects the mother as well as the newborn baby.
The home insurance covers you against any damage caused to your home due to any natural or manmade calamities like earthquakes, floods, fires, etc.
Different types of health insurance are as follows:-
- Home structure/building insurance:- It protects you against any damage caused to your home during calamities.
- Public liability coverage:- This type of insurance protects against damage to the guest or any third party living in the insured residential property.
- Burglary or theft insurance:- The policyholder gets compensation for the stolen goods in case of burglary or theft.
- Content insurance:- It provides the policyholder with compensation for the lost furniture, vehicle, or other appliances due to natural or manmade calamities.
- Standard fire and special perils policy:- It covers the home against any type of damage caused due to fire, natural calamities, or any anti-social activities such as explosions, strikes, riots, etc.
- Tenant’s insurance:- It protects you from the loss of any personal property while living in rented property.
- Landlord’s insurance:- Protects the landlord against contingency like public liability or loss of rent.
Motor insurance protects you against the damage caused to your vehicle due to any road accident. There are three types of motor insurance, they are as follows:-
- Car insurance:- This insurance secures your four-wheeler from any kind of damage caused due to an accident.
- Bike insurance:- You can ensure your two-wheeler through this insurance.
- Commercial vehicle insurance:- It provides coverage for vehicles used for commercial purposes.
Term Life insurance:-
Term life insurance is the most common life insurance. The term life insurance offers high life cover for a specific period. The premium of the term life insurance is low as compared to other life insurance.
There is no maturity period in Term life insurance. If anything happens to the policyholder within the policy period, the policyholder’s family will get the amount mentioned in the policy agreement.
Whole Life insurance:-
Whole life insurance is also known as traditional life insurance. It provides coverage for the entire life of the policyholder. Whole life insurance not only secures your family from financial cries after you also helps you to save money since it also has a saving component. The maturity period of whole life insurance is 100 years.
Endowment plans not only provide the life cover to the policyholder but also allow them to save regularly. If the policyholder survives the maturity period of the endowment plan he/she will receive a lump sum amount. If anything happens to the policyholder before the maturity period the policyholder’s family will get the assured amount.
Unit-Linked insurance plan:-
If you want to invest and also want a life cover through a single policy, then unit-linked insurance plans are for you. The portion of the premium you pay for the unit-linked plan is invested in equity and debt. And the remaining premium contributes to life cover.
A child plan helps you to financially secure your child’s life goals like education, marriage even in your absence. After maturity, you can use the received amount to fulfill the financial requirements of your child.
It is also known as a retirement plan. It helps you to accumulate the portion of your saving for the long term. Specifically, this plan ensures your post-retirement life, since you will continuously receive a steady income through it.
We had discussed almost every type of insurance policy that is available in India. Among those a Term life Insurance and Health insurance are the ones, everyone must have.
If you have children you then you should consider child plans. You should also have a pension plan to secure your post-retirement life. If can also consider the other insurance policies based on your needs and goals.