In life, any unexpected situation can disrupt your family’s well-being. For such scenarios, various kinds of life, health, and general insurance policies can be found in India that offer comprehensive financial safety to your loved ones and yourself. At the same time, you can go for an insurance cowl to guard your assets and property. However, before buying insurance coverage, it’s crucial to know the different types of insurance policies after which choose those that align together with your wants.
What is Insurance?
Insurance is a legal agreement between a person and the insurance company, underneath which, the insurer guarantees to offer monetary protection (Sum assured) in opposition to contingencies for an amount (premium). Several types of insurance policies out there these days may be broadly divided into two classes:
- General Insurance coverage
- Life Insurance coverage
Different Kinds of Insurance Policies Out there in India
Following are the forms of insurance out there in India:
1. General Insurance
Following are some of the forms of basic insurance available in India:
- Health Insurance
- Motor Insurance
- Home Insurance
- Fire Insurance
- Travel Insurance
2. Life Insurance
There are various forms of life insurance. Following are the commonest forms of life insurance coverage available in India:
- Term Life Insurance coverage
- Whole Life Insurance
- Endowment Plans
- Unit-Linked Insurance coverage Plans
- Child Plans
- Pension Plans
Let us look closely at the different types of insurance coverage policies:
General Insurance
Normal insurance policies are one of many forms of insurance that supply coverage within the type of a sum assured against the losses incurred other than the demise of the policyholder. Overall, basic insurance contains different types of insurance policies that supply financial protection against losses incurred because of liabilities reminiscent of the bike, automobile, house, health, and related. These varied forms of Normal Insurance coverage Policies embody:
Health Insurance
Health insurances are forms of insurance coverage that cover the bills incurred due to medical care. Health insurance plans both pay or reimburse the amount paid in the direction of the therapy of any sickness or harm. Different types of health insurance cowl various medical care bills.
It usually affords safety against:
a) Hospitalization
b) Treatment of critical illnesses
c) Medical bills post hospitalization
d) Daycare procedures
There are a few forms of health insurance plans additionally cowl the cost of resident therapy and pre-hospitalization bills. Rising prices of healthcare in India Are making health insurance a necessity. Different types of health insurance plans out there in India include:
1) Individual Well being Insurance: Presents coverage to only an individual
2) Family Floater Insurance: Permits your entire household to get coverage under a single plan, which normally covers husband, spouse, two children
3) Critical Illness Cowl: Specialised forms of health insurance that offer coverage in opposition to varied life-threatening diseases like stroke, coronary heart assault, kidney failure, most cancers, and related others. Policyholders get a lump sum quantity on analysis of a critical sickness.
4) Senior Citizen Health Insurance: These kinds of insurance plans cater to all individuals above 60 years of age
5) Group Health Insurance: Supplied by an employer to its employee
6) Maternity Well being Insurance: Covers medical bills for prenatal, post-natal, and supply stage, offering safety to each the mom and the newborn
7) Private Accident Insurance: These kinds of insurance plans cowl financial liabilities arising because of accidental accidents, disability, or death
Motor insurances are types of insurance coverage that offer monetary help in case your bike or automobile will get concerned in an accident. Varied forms of Motor insurance policies in India include:
1) Automotive Insurance: Individually owned four-wheelers are coated underneath this plan. Several types of automobile insurance – third-party insurance and complete cowl policies.
2) Bike Insurance: These are types of motor insurance where individually owned two-wheelers are coated in opposition to accidents
Commercial Vehicle Insurance: One of many varieties of motor insurance coverage, which affords protection to any automobile used for commercial functions
Home Insurance
Because the name suggests, a house insurance coverage affords complete protection to the contents and structure of your own home in opposition to any bodily destruction or harm. In different phrases, home insurance will present coverage against any pure and human-made calamity, reminiscent of hearth, earthquake, tornado, burglaries, and theft.
Different types of house insurance policies include:
1) Dwelling Structure/Building Insurance coverage – Protects the structure of the house in opposition to damage during any calamity
2) Public Liability Coverage – Supplies protection against any harm to a visitor or third-party on the insured residential property
3) Standard Fire and Special Perils Policy – Protection against damages triggered because of hearth outbreaks, pure calamities (e.g., landslides, rockslides, earthquakes, storms, and floods), and anti-social human-made actions (e.g., explosions, strikes, and riots)
4) Private Accident – Supplies monetary protection to you and your family against any kind of permanent dismemberment or sudden demise to the insured particular person, wherever around the world
5) Burglary and Theft Insurance – Supplies compensation for stolen goods in case of a burglary or theft
6) Contents Insurance – Provides compensation for lack of furniture, autos, and other appliances in case of a hearth, theft, flood, or riots
7) Tenants’ Insurance – Supplies financial safety to you (as a tenant) against any lack of private property living in a rented home
8) Landlords’ insurance – Supplies coverage to you (as a landlord) in opposition to contingencies reminiscent of public liability and lack of hire
Fire Insurance
Fire insurance policies are different types of insurance coverages that compensate for any losses incurred because of a hearth breakout with a sum assured. These types of insurance insurance policies usually present a big quantity of protection to assist both people and companies to reopen their places after incurring extensive harm because of fire. These kinds of insurance coverage cover battle risk, turmoil, riots losses as nicely.
Different types of hearth insurance in India are –
1) Valued policy
2) Specific Policy
3) Floating Policy
4) Consequential Policy
5) Replacement Policy
6) Comprehensive Fire insurance policy
Travel Insurance
As the name suggests, journey insurance is a sort of monetary protection that protects you and your family members when you are visiting any place in India or overseas. Whether you might be traveling solo or with your family members, the travel insurance coverage protection will assist guarantee that you have a peaceful journey.
The journey insurance coverage takes care of any points that you could be facing during your journey reminiscent of lack of baggage, flight cancellations, lack of passport, personal and medical emergencies. Several types of journey insurance policies embody:
1) Domestic Travel Insurance: Within the nation
2) International Travel Insurance: For any trips or vacations outside of India
3) Individual Travel Insurance: In case you are traveling alone
4) Student Travel Insurance: In case you are going overseas for further studies
5) Senior Citizen Journey Insurance: For senior citizens, aging between 60 to 70 years
6) Family Travel Insurance: For any household vacations
Life Insurance
Life insurance plans provide coverage in opposition to unfortunate occasions like demise or incapacity of the policyholder. Apart from monetary protection, there are various types of life insurance policies that allow the policyholders to maximize their savings by way of regular contributions into different fairness and debt fund options.
You can select a life insurance coverage to secure your family’s financial future against life’s uncertainties. The coverage contains a large quantity, which is payable to your loved ones if anything occurs to you. You might have the flexibility to decide on the life insurance policy interval, protection amount, and payout choice based on the financial requirements. Different types of life insurance coverage are as follows:
- Term Life Insurance coverage
- Whole Life Insurance
- Endowment Plans
- Unit-Linked Insurance Plans
- Child Plans
- Pension Plans
Term Life Insurance Plans
Term insurance is the purest and most affordable type of life insurance wherein, you can go for a high life cowl for a particular interval. You’ll be able to secure your family’s financial future with a time period life insurance plan by paying a low premium (time period insurance plans generally do not have any Maturity worth, and thus, offer decrease charges of the premium than different life insurance products.)
If anything occurs to you inside the coverage interval, your family members would obtain the agreed Sum Assured as per the payout choice chosen (some time period insurance plans provide multiple payout choices as well)
Whole Life Insurance Plans
Complete life insurance plans also referred to as ‘traditional’ life insurance plans, present protection for your entire lifetime of the insured individual, versus every other life insurance coverage instrument that provides coverage for a specific variety of years.
Whereas a complete life insurance plan affords to pay a demise profit, the plan additionally contains a savings element, which helps accrue a money worth throughout the policy time period. The maturity age for entire life insurance coverage is 100 years. In case, the insured particular person lives past the maturity age, the entire life plan will change into the matured endowment.
Endowment Plans
Endowment plans essentially present financial coverage to the policyholder against life’s uncertainties, whereas permitting them to avoid wasting usually over a sure period. Upon maturity of the endowment plan, the policyholder receives a lump sum quantity if she or he survives the policy time period.
If something occurs to you (as Life Insured), the life insurance endowment coverage pays the complete Sum Assured to your loved ones (beneficiaries)
Unit-Linked Insurance Plan (ULIP)
Unit Linked Insurance Plans are forms of insurance coverage that supply each investment and insurance benefits underneath a single coverage contract. A portion of the premium that you pay towards a Unit Linked Insurance Plan is allotted to quite a lot of market-linked fairness and debt devices.
The remaining premium contributes towards offering the life cowl all through the coverage tenure. ULIPs permit the flexibility to decide on the allocation of premium into different devices as per your monetary requirements and market threat urge for food.
Child Plans
Child plans are forms of life insurance coverage that help you financially secure your child’s life goals such as larger education and marriage, even in your absence. In other phrases, youngster plans provide a mix of savings and insurance benefits that support you within the monetary planning on your youngster’s future needs at the proper age.
The sum of cash acquired on Maturity can be utilized to satisfy the monetary necessities of your youngster.
Pension Plans
A pension plan, also known as a retirement plan, is a sort of funding plan that aids you in accumulating a portion of your financial savings over an extended interval. Primarily, a pension plan helps you cope with financial uncertainties post-retirement, by guaranteeing that you just proceed to obtain a gentle move of revenue even after your working years are over.
In other phrases, a pension plan permits you to create a monetary cushion on your life post-retirement, wherein you contribute a specific amount of cash usually till your retirement. Subsequently, the collected quantity is given again to you as an annuity or pension at common intervals.
Tax Benefits of Various Types of Insurance
Amount paid towards the premium for different types of life insurance coverage is tax-deductible
1. Beneath Section 80C of revenue tax 1981, the premium payable towards all forms of life insurance plans is tax-deductible as much as Rs 1.5 lakh
2. Under Section 80D of revenue tax 1981, the premium payable towards all forms of health insurance plans is tax-deductible, topic to a most of Rs 25,000 for self, spouse, and children and an extra 25,000 for folks having age beneath 60 years (the tax savings can go as much as Rs 50,000 for senior residents individual and 50000 if dad and mom are senior residents. Total deduction can go up to 1Lakh)
Factors Defining Your Life Insurance Protection
Though Life insurance protection and its premiums depend on varied elements, some necessary ones are:
1. Age of the policyholder
2. Health conditions – each present and historical past
3. Occupation
4. Smoking and drinking habits
5. Sort of insurance policy
6. Declare history
7. Location
You read about various kinds of insurance that you may purchase basis your wants and requirements. However, for additional queries on varied forms of life insurance insurance policies, you’ll be able to contact Max Life Insurance. We provide a number of life insurance solutions under every class so that you can select the one which best suits you. Max Life Insurance coverage claim-settlement ratio for FY 19-20 is 99.22% as per Annual Audited Monetary FY 19-20. With our around-the-clock buyer assist services, you will get help to simply select one of the various kinds of life insurance plans offered by Max Life Insurance.
Frequently Asked Questions (FAQs)
Q. What are the different types of Insurance in India?
A. Following are the types of insurance in India:
1. General Insurance
Following are the various forms of basic insurance in India:
- Health Insurance
- Motor Insurance
- Home Insurance
- Hearth Insurance
- Travel Insurance
2. Life Insurance
Following are several forms of life insurance available in India:
- Term insurance
- Term insurance with return of premium
- Unit Linked Insurance Plans
- Endowment plans
- Whole life insurance
- Group life insurance
- Child Insurance Plans
- Retirement Plans
