A Complete Guide On Different Types Of Insurance Policies

Unplanned expenses are a bitter truth of life. When you think that you are financially secure, a sudden expenditure can significantly hamper this security, instances like this may also leave you debt-ridden. Insurance policies provide a semblance of help to minimize financial liability from unforeseen occurrences.

There is a wide range of insurance policies which is aimed at safeguarding part of your health or assets. Sometimes people are not sure and they hesitate in purchasing any insurance plan basically this happens because of a lack of knowledge and other benefits of these plans.

Sometimes it is difficult to understand which policy is better for us. We try to make it easy for people to understand the different types of insurance plans and understand well about the benefits, cover, and settlement.

It is true when you are able to choose the best policy for yourself or your family you get a really good feel of satisfaction. One should invest proper time to save time in finding the best insurance policy.

We all choose an insurance policy for our family members, for a child’s education, home safety, travel safety, vehicle safety, etc. Insurance makes you tension free and financially stable in case of any uncertain and unexpected event.

Image Credit: Freepik

Broadly, there are 8 types of insurance, namely:

  • Life Insurance
  • Motor insurance
  • Health insurance
  • Travel insurance
  • Property insurance
  • Mobile insurance
  • Cycle insurance
  • Bite-size insurance

You must know how each of these plans works because simply knowing the insurance policies will be of no help. Adequate knowledge about these plans is a must otherwise you will not be able to save your finances and do some financial well-being for your loved ones.

Before you buy an Insurance policy you should know a few important points-

  • Service benefits- it includes customer support, pick-up and drop facility, etc.
  • Best value- if you like the services and the Sum insured, you can check the premium and discount you can get.
  • Choose the right Sum Insured- keep a check on how much time your insurance company takes to settle claims.

It is a risky business for your family you don’t have insurance policy. Yet, that does not seem to bother 75% of the Indian population or 988 million Indians who don’t own a life insurance policy.

Insurance Policy
                                                                                Image Credit: Freepik

It’s is just an example.

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Basically two types of insurance available today, are Life Insurance and General Insurance.

In case of an unfortunate event, insurance provides safety. They just differ in the way they function. For example, term insurance is the most basic type of cover – term insurance can only provide a payout in case of death, Endowment policies offer some return on investment whereas ULIPS are a combination.

 Here is some list of insurance:

a) Life Insurance:- It is different from other insurance in the sense that, here, the subject matter of insurance is the life of a human being in this insurance the insurer will pay the fixed amount of insurance at the time of death or at the expiry of a certain period.

Life insurance – There are many types of Life Insurance such as:

  • Term insurance,
  • Endowment insurance,
  • ULIP
  • Money-back policies, etc.

b) General Insurance:-This insurance includes Property Insurance, Liability Insurance, and Other Forms of Insurance. The strictest form of liability insurance is fidelity insurance, whereby the insurer compensates the loss to the insured when he is under the liability of payment to the third party.

c) Property Insurance:-Under this insurance property of person/persons are insured against a certain specified risk. The risk may be fire or marine perils, theft of property or goods damage to property at the accident.

d) Marine Insurance:-This type of insurance provides protection against the loss of marine perils. The marine perils are; collision with a rock or ship, attacks by enemies, fire, and captured by pirates, etc. these perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight.

e) Fire Insurance:-Fire Insurance covers the risk of fire. In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well. With the help of fire insurance, the losses arising due to fire are compensated and the society is not losing much.

f) Liability Insurance:-The general Insurance also includes liability insurance whereby the insured is liable to pay the damage of property or to compensate for the loss of persona; injury or death. This insurance is seen in the form of fidelity insurance, automobile insurance, and machine insurance, etc.

g) Social Insurance:-The social insurance is to provide protection to the weaker sections of the society who are unable to pay the premium for adequate insurance.

h) Personal Insurance:-The personal insurance includes insurance of human life which may suffer a loss due to death, accident, and disease, Therefore, personal insurance is further sub-classified into life insurance, personal accident insurance, and health insurance.

i) Property Insurance:-The property of an individual and of the society is insured against loss of fire and marine perils, the crop is insured against an unexpected decline in deduction, unexpected death of the animals engaged in business, break-down of machines and theft of the property and goods.

j) Guarantee Insurance:-The guarantee insurance covers the loss arising due to dishonesty, disappearance, and disloyalty of the employees or second party. The party must be a party to the contract.

k) Other Forms of Insurance:-Besides the property and liability insurances, there are other insurances that are included in general insurance.

l) Miscellaneous Insurance:-The property, goods, machine, Furniture, automobiles, valuable articles, etc. can be insured against the damage or destruction due to accident or disappearance due to Insurance is a means of protection from financial loss.

Insurance buffers you from unexpected costs. There are so many people who just know about insurance and its importance in life but at the same time, they are not aware of the different types of insurance plans available.

When life introduces you with challenges be prepared with the right type of insurance which can be your best backup for such uncertain situations.

It enables mitigation of certain losses that can occur anytime, provides financial stability, and also make sure it promotes trade and commerce which results in growth and development. Every person should be aware of the various types and benefits of Insurance.

Have Insurance and feel Secured.

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