Insurance simply means managing your risk. When you buy insurance it means you are purchasing legal protection against unexpected financial losses. If you have insurance, the insurance company pays you or someone in your family who you have chosen if something bad happens to you.
Let’s Understand Insurance
If you don’t have insurance and an accident happens, you may be responsible for all related costs which is not possible to bear alone for most middle class people. We could have uncertainties in life that could shake us up at any moment, such as an unfortunate death or a medical emergency, an accident or damage to our property, vehicle, etc. Insurance is a contract that is represented by a policy, in which an individual or entity gets financial protection and/or reimbursement against personal losses from an insurance company. Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make these payments affordable for the insured individual or entity. When you have insurance you have greater peace of mind if you know that you and your loved ones are financially secure from various unforeseen situations that you or your family members can face.
Why Insurance Is Needed
Insurance plans help to pay for your hospitalization bills, any medical emergencies, any illnesses and treatment, and medical care required in the coming future. In an insurance plan, the financial loss that a family has to bear due to the unfortunate death of the sole earner can be covered. Bearing such financial impact of these situations can have a huge toll on your life savings and it might happen that you need to dip into your family’s hard earned money to cover the expenses. Thus, you need insurance for you and your family for proper coverage and financial support against all risks linked to your life, health, and property.
What Are The Different Types of Insurance
1. Life Insurance
Life Insurance is a policy where the policyholder can confirm financial freedom for his/her family members after death. If you are the sole earning member of your family then in such an event, your death would financially devastate your whole family. Life insurance policies make sure that such uncertain circumstances do not happen to your family by providing financial assistance to your family in the event of your passing. There are benefits of Life Insurance policy:
- Life Insurance secures your family’s financial future. The policy ensures that your family’s financial independence is maintained even after your passing. And encourages saving habits, you need to pay policy premiums. Hence, buying such an life policy promotes the habit of saving money.
- It helps to plan your retirement at right time. There are certain life insurance policies that also act as investment options like pension plans offering a lump-sum pay out immediately after you retire, helping you to fund your retirement.
- It offers Tax-Benefits which means if you pay life insurance premiums, you are qualified for tax benefits in India, under Section 80(C) and 10(10D) of the Income Tax Act. You can save a considerable sum of money as taxes by opting for a life insurance plan.
2. Health Insurance
Health insurance refers to a type of general insurance, that provides financial assistance to policyholders at the time of admission to hospitals for treatment. Additionally, some plans also do cover the treatment cost commenced at home, prior to a hospitalization, or after discharge based on the condition. As India is seeing a rise in the medical inflation, buying health insurance has become a necessity. There are various types of health insurance plans available in India such as Individual Health Insurance, Senior Citizen Health Insurance, Maternity Health Insurance, Critical Health Insurance, Group Health Insurance and many more. The benefits provided by Health Insurance are:
- Those who have health insurance premiums can enjoy income tax benefits under Section 80D of the Income Tax Act which states that one can avail of a tax benefit of up to Rs.1 Lakh on the premium payment of their health insurance policies.
- If you can find treatment at one of the hospitals that have tie-ups with your insurance provider then you can easily avail for cashless claim benefit. It ensures that all medical bills are directly settled between your guarantor and the hospital.
3. Travel Insurance
Travel insurance is a type of insurance that covers the costs and losses related with traveling. It is a necessary protection for those traveling domestic or abroad. Several travel-related companies selling tickets or travel packages also provide the option to purchase travel insurance give consumers. The coverage includes 24/7 emergency services, such as replacing lost passports, trip cancellation, cash wire assistance, and re-booking canceled flights or even transport accident. Some travel policies cover damage to personal property, rented equipment, such as rental cars, or even the cost of paying a ransom. The benefits include:
- If you experience baggage loss or delay then travel insurance helps you to claim financial assistance when there is a delay losing your luggage during the trip. If such happen then you can purchase some of the necessary items with the insurance money.
- International travel insurance plans support trip cancellations in case of emergencies if your plan gets canceled. You are entitled to get financial assistance to pay penalties and cancellation charges for flights, hotels, etc.
- Another important benefit is that the policy helps you reclaim lost travel documents such as Visa and passports that are essential documents during an international trip. Opting for these documents can be expensive and having international travel insurance ensures that you have the necessary financial back up to reapply for replacement documents as and when necessary.
4. Vehicle Insurance
There are insurance for your vehicles too- Two Wheeler Insurance and Car Insurance. There’s a third party liability which is the is the minimum mandatory requirement for all motorized vehicle owners, as per the Motor Vehicles Act of 1988. It pays the financial liability to the third party affected in any mishap, ensuring that you don’t have to face any legal hassle due to the accident. There’s a Comprehensive Cover and an Own Damage Car. The Comprehensive Cover plans offer better protection and security as these plans cover the expenses incurred for repairing the damages to the policyholder’s own vehicle due to an accident. Also the Vehicle Insurance plan offers a pay out in case your vehicle sustains damage due to fire, man-made and natural calamities, riots and other such instances.
- The Vehicle Insurance helps you avoid any traffic fines and other legalities that you would otherwise need to bear and in case your vehicle is stolen, your insurance policy will help you reclaim a portion of the car/bike’s on-road price.
- If you injure a person or damage someone’s property then having this policy will you to meet the monetary losses, effectively. After any accident, you need to spend considerable sums on repairing your own vehicle insurance plans help you to undertake repairs immediately.
5. Property Insurance
The Property Insurance policy protects the physical goods and the equipment of the home (home insurance) or your business against any loss from theft, fire, and any other menaces. This can be an all risk coverage policy that assures protection against all the risks specified in the document. Office Insurance, Home Insurance, Shop Insurance, or Building Insurance all falls under this category. The benefits include:
- It provides protection against floods, burglaries, floods, and/or any natural calamities.
- The property insurance policy can prevent financial liabilities from the above-mentioned mishap. If your property is hampered in an area prone to theft and burglaries, such a policy is critical to safeguard your financial security. If floods can ruin your property leading to substantial losses such insurance protects against damages arising from earthquakes, storms and more.
The best Insurance companies in India are Aegon Life Insurance, LIC, Bharti Axa Life Insurance, Exide Life Insurance, Kotak Life Insurance, and many more within the notable names. Insurance is a necessity for you and your loved ones.