Ramesh, who is a father of three children, lives happily in a nuclear family. After completing his education, he worked his way up and became a manager in a private concern. With a handsome income from his job, life is a peaceful affair with not many big problems.

One day, as usual, he waves goodbye to his family and leaves for the office in his car. While driving, he was just going through in his mind the tasks to be completed at the workplace. In an unexpected turn of events, a truck hits his vehicle and he get badly injured. He is soon admitted to the hospital and the doctor tells his family that he is in a critical condition. Surrounded by his bereaved family, he is laid on the hospital bed in a vegetative state. Being the sole breadwinner of the family, all that was running in his mind was ‘Who would take care of my family now?’’. He screamed, “No” and woke up startled in the middle of the night. Fortunately, the incident was just a bad dream.

Ever since the nightmare, he started thinking deeply, “how can I take care of my family even after I am gone?”. It led him to take an important financial decision to secure the future of the people he loved the most. Yes, you may have guessed it rightly, it is an “Insurance”.

Life is full uncertainties and surprises and one can never predict what would happen tomorrow. Hence is it not wise to plan and protect the future of the people we care the most? An Insurance could be one of the best ways through which you can give complete financial protection to your family when you are unable to take care of them.

Well, just like Ramesh, you may have made up your mind to take an Insurance Policy. Before that let us now clearly understand what, an insurance is and why should you take it.

What is an Insurance and why should you take it?

Insurance, as we may know it, is a financial tool that helps in reducing the economic crisis that might occur due to unforeseen events. It is a contract or agreement with an insurance provider whereby the company provides you financial security in exchange of a small amount known as a premium that is paid over a set period of time. The financial loss caused due to a peril is compensated through the insurance.

Suiting the requirements, an insurance can be taken for various purposes and needs. Your vehicle can be insured whereby you can claim insurance when it is damaged in an accident, natural calamity or disaster. Your health can be insured whereby you can claim insurance for the illnesses covered under the plan. Your house and offices can be insured to get compensation when the property runs into a risk of damage or disaster. Similarly, there are insurances to suit various purposes.

life insurance, which is a popular option, can help in meeting the needs of your family after your death. It can be used for the education of your children, paying off the debts you had taken or for the wedding of your children.

Apart from being a cover against risks, an insurance can also get you tax benefits up to 1.5 Lakhs under section 80C. Ultimately, an insurance gives you a peace of mind that you have covered your family in difficult times.

Having understood the importance of an insurance, let us learn more deeply about the types of insurance policies in the next article.