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What is Insurance ? Types of Insurance

Insurance is a way to compensate for any kind of loss in the future. That is why people secure their future by getting insurance. Insurance simply means risk protection. If an insurance company insures any person of any kind, it compensates for their financial loss.

If the insurance company has insured an item such as a car home or mobile, it provides compensation according to the condition stipulated in case of breakage of that item. Insurance acts as a link between the individuals and the insurance company.

If an insurance company insures a person of any kind, he gets a certain amount from that person according to his policy. In the future, the person provides compensation according to the condition on any kind of loss.

Types of Insurance in India

Generally, there are two types of insurance. We have given detailed information about both these types in this article below.

  • Life Insurance
  • General Insurance

Life insurance

Life insurance refers to insuring a person’s life. If a person has got life insurance from a company, then on his death the insurance company provides compensation. If the head of the family dies accidentally, then it is very important to get life insurance for running the household expenses.

If the said person has taken life insurance, then the insurance company provides compensation to improve the financial condition of his family.

Types of Life Insurance

There are mainly two types of life insurance. First term life insurance and second whole life insurance. Apart from this, there are many types of insurance, but the main two types are considered.

Term life insurance

In life insurance, the most affordable and good plan is considered to be term life insurance. It occurs for a short duration. Most people consider term life insurance policy to be good.

Term insurance policy is for a few years only, so during that you have to pay its premium. After this period is over, you get the money back. If you die before this, then you get the money according to the policy.

Whole life insurance

Whole life insurance, on the other hand, has no fixed term. Simply put, it is a permanent insurance. Every month some amount of your premium changes to your benefit.

Other Types of Life Insurance

  • Universal life insurance
  • Indexed universal life insurance
  • Variable life insurance
  • Variable universal life insurance
  • Final expense insurance
  • Group life insurance

General insurance

Apart from life insurance, if any item is insured then it comes under the category of general insurance. There are many types of general insurance such as home insurance, auto insurance, health insurance etc.

Types of General Insurance

Now we are going to talk about the types of general insurance in India. There are several types of general insurance in India such as health insurance, travel insurance, motor insurance, marine insurance, home insurance, and commercial insurance. Next in the article, we are going to know about the definitions, features and types of these general insurance.

Under General Insurance, an agreement is signed between the policy holder and the insurer. General insurance is applicable only if the insurer gets premium at the right time. At the moment, if the policy holder suffers any kind of loss, the insurer compensates him.

Health insurance

Health insurance is done keeping in view the health protection of the person. If the person dies in any way or becomes an accident, then health insurance proves beneficial. If the person is hospitalized for any reason, then he / she is paid by Health Insurance.

Some important things are covered by Health Insurance which are as follows:

  • Annual health check up
  • Daily Hospital Case
  • Psychiatric support
  • Accidental Hospitalization
  • Accidental Illness and Hospitalization

Travel insurance

Travel insurance mainly helps you with finance. Travel insurance helps you in any type of medical and non-medical emergencies if you travel anywhere throughout India. The maximum duration of travel insurance is 180 days. Travel insurance mainly covers these things :

  • Medical emergency
  • Accidental death
  • Hijacking
  • Lost password
  • Lost luggage
  • Flight delays

Motor insurance

If you want to drive legally in India, then motor insurance is a must. It is said that motor insurance is not only necessary but also necessary. Motor insurance is necessary to complete the damage caused at the time of driving. According to the Motor Vehicle Act, there is a Motor Insurance Mandatory for legally driving. Motor insurance covers accident, theft, car fire and natural disaster.

Home insurance

If you are building a house, then it is necessary to get it insured. You build a house with your hard work and if it is destroyed due to any disaster, then home insurance is the only way left. A home insurance policy helps you get out of the disaster caused by home. In fact, a home insurance policy gives you protection from the happenings in the home.

Commercial insurance

If you do a business or are in the business line, then knowledge of commercial insurance is very important. Commercial insurance is a way to protect you from loss in business. Commercial insurance covers some important things which are as follows :

  • Business interreption
  • Marine insurance
  • Liability Insurance
  • Engineering insurance
  • Property insurance
  • Employees Benefit Insurance
Crystal Merrill
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