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Insurance

Learn about a wide range of insurance schemes that can secure your family’s financial future and safeguard your property against any unfortunate events.

What is an insurance?

It could be said that everyone would go through unfortunate events at some point in life. It could be a destruction or damage to something you own or that belongs to you, diseases or a sudden death. Such instances can cause a great financial loss to you and your family members and staying protected is the only best way that can offer some relief against the misfortune. Insurance schemes protect your family and your properties against such untoward incidents.

An insurance is an agreement between the insurance company and the insured, wherein the insurer will cover the losses of the insured up to the amount guaranteed. However, there are terms and conditions applicable on the insurance policies which the insured must be aware of before signing the policy.

How does an insurance policy work?

An insurance scheme can be taken by an individual or a company. We already know that an insurance policy is a legal contract between the insured and insurance company. As per the terms and conditions, the insurance provider promises to pay out the insurance amount either to the insured or the nominee to cover the losses.

The insured individual usually pays the insurer a certain amount as premium monthly, quarterly, half-yearly or annually based on his/her convenience. The premium amount would be mostly a smaller amount when compared to the insured amount which could be massive in return. Everyone would be surprised how an insurance company is able to promise such a huge amount against a smaller premium. The insurance scheme taken can be claimed only in the event of unfortunate events. Hence, only a few people end up claiming the insurance amount. This enables the insurance companies to provide such a high cover at lower premiums. For example, you may have taken a health insurance for a critical illness which provides a higher cover at low premium. If you never got any such critical illness, you may not be able to claim the insurance amount.

There are also insurance schemes where you can get guaranteed returns. Such type of schemes may have lower returns with tricky terms and conditions.

Types of Insurance Schemes

In today’s scenario, you can cover almost anything under an insurance scheme. Following are some of the most common and popular insurance schemes that one must be well informed. They are:

Life Insurance

This is the most essential and must have scheme in your insurance portfolio. This insurance provides complete security to your family during the untimely demise or disability. Financial experts strongly emphasize on taking this plan especially if you are the only breadwinner of your family.

There are two types of life insurance schemes that everyone often gets confused about. One is term plan and the other is whole life insurance plan. A term plan gives you the coverage only up to a specific period of your life, and you won’t be able to claim the benefits if you outlive the tenure. In a whole life insurance scheme, you can get guaranteed returns at the maturity. The premiums may be higher, and the returns may be lower than the term plans.

 Term PlanWhole Life
PremiumLowerHigher
Tenure (Age)Up to 75Up to 120
Loan facilityNot availableAvailable
Guaranteed Cash ValueNoYes

Health Insurance

A health insurance provides a cover against the medical costs incurred due to any unforeseen illnesses or disability. It is very beneficial for you and your family to cover the cost of treatment and medication costs.

There are 34 critical illnesses listed by the insurance companies which can be covered by the health insurance schemes. You can also buy a health insurance policy for specific illnesses. A great deal of money is saved when you fall into some serious illnesses.

Vehicle Insurance

Unlike other insurance schemes, vehicle insurance is not a choice that one can make. It’s a mandatory to get a vehicle insurance for all types of vehicles. Failure to hold a vehicle insurance will result in payment of penalty or legal cases being filed against the owner. Hence, one must buy a vehicle insurance while purchasing the vehicle.

Accidents, life, liability risk, theft or damage caused due to any natural calamity are covered under vehicle insurance. Separate insurance schemes are available for each type of vehicle. The insurance amount will differ based on the type of vehicle you own. High end cars and commercial vehicles will carry higher premium than ordinary ones. You can buy the insurance cover from 1 year to 5 years, and it has to be renewed for the upcoming years before the expiry date.

Travel Insurance

Travel insurance schemes cover the losses in a travel, such as accidents, unexpected medical expenses, theft of baggage, cancellation of flights, etc. You do not have to buy a travel insurance every time you travel; you can rather opt for annual plans which will cover many trips. The premium amount on a travel insurance depends on the length of your travel. Longer stay will attract higher premiums.

Home Insurance

Home insurance schemes are offered in two types i.e. structure only policy and content only policy. The former covers the building alone and later covers the contents of the house. You can also go for a comprehensive coverage by buying both. A home insurance protects you from any financial loss due to natural calamities, accidents and theft.

Unit Linked Insurance Plans (ULIPs)

This is best suited for individuals who wish to use their insurance policies as investment. The premium paid under this policy is partly is used as a risk cover and partly invested in funds. The amount is invested in bonds, equities, debts, market funds, hybrid funds, etc. This is a long-term scheme that offers the best of both the worlds, i.e. investment and insurance. You stay protected while you invest the amount you pay as premium.

Why should you buy insurance?

Insurance schemes are essential to manage all types of risks. When you buy an insurance policy, you transfer all the costs of potential loss to the insurance company who would securely invest your premium amount. You can make a claim when there is an unfortunate loss or damage to the thing you have insured. The amount insured could be higher than the premium paid. An insurance cover gives you a peace of mind and lets you relax without having to worry about the financial well-being of your family.

Insurance

It is recommended you buy an insurance policy while you are young as you may get the benefit of paying lower premium amount. The value of premium keeps on increasing year by year. Once you reach the later part of your life, you may have to pay a hefty sum on an insurance policy.

Latest & Update Insurance News

Bharti AXA merges with ICICI Lombard General Insurance Company 14 Sep 2021

IRDAI has granted the final regulatory approval for the merger of Bharti AXA General Insurance company with ICICI Lombard General Insurance company. Following this merger, ICICI Lombard becomes the third-largest general insurance company in India. Ex...

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IRDAI has granted the final regulatory approval for the merger of Bharti AXA General Insurance company with ICICI Lombard General Insurance company. Following this merger, ICICI Lombard becomes the third-largest general insurance company in India. Existing ICICI Lombard customers will not experience any changes as they continue to deal with the same insurer. Bharti Axa policyholders will be seamlessly transferred and can continue with the same plan or a similar plan at the time of renewal, keeping disruptions minimal.

LIC launches Revival Campaign for Lapsed Policies 30 Aug 2021

Missed paying your LIC premium? You can now revive your lapsed policies. The Life Insurance Corporation of India has announced a policy revival campaign starting from 23rd August to 22nd October 2021. Customers who have missed paying policy premiums ...

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Missed paying your LIC premium? You can now revive your lapsed policies. The Life Insurance Corporation of India has announced a policy revival campaign starting from 23rd August to 22nd October 2021. Customers who have missed paying policy premiums in the last five years and during the pandemic can revive their lapsed policies during this special campaign. LIC offers concession on premiums up to 20% to 30% with a maximum discount of Rs. 3000 during the campaign period. Health insurance policies, microinsurance and conventional LIC plans can be revived during this period.

IRDAI Publishes Latest Insurance Claim Settlement Ratios 29 Jun 2021

The Insurance Regulatory and Development Authority of India (IRDAI) has published the claim settlement ratios of health insurers and general insurers for FY 2019-2020. Among private insurers, HDFC Ergo General Insurance tops the CSR chart with 99.8% ...

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The Insurance Regulatory and Development Authority of India (IRDAI) has published the claim settlement ratios of health insurers and general insurers for FY 2019-2020. Among private insurers, HDFC Ergo General Insurance tops the CSR chart with 99.8% claims settled within 3 months of making the claim. This is followed by Edelweiss General (CSR 99.72%) and Go Digit (CSR 99.65%). Make sure to check the CSR before choosing an insurer.

LIC Launches New Jeevan Shanti – A Single Premium Pension Plan22 Oct 2020

LIC has launched a new pension plan named as the New Jeevan Shanti plan. It is a non-participating, non-linked single premium plan. The plan offers annuity (pension) to the insured after the deferment period for entire life. You can choose from two a...

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LIC has launched a new pension plan named as the New Jeevan Shanti plan. It is a non-participating, non-linked single premium plan. The plan offers annuity (pension) to the insured after the deferment period for entire life. You can choose from two annuity options - pension for single life or joint life. It can be purchased both online and offline via LIC agents. Besides pension, the plan also offers death benefits that are paid to the nominee after the death of the last survivor. The plan can be purchased by paying a minimum premium of Rs. 1.5 lakhs and the minimum annual pension offered by the plan is Rs. 12,000. There is no cap on the maximum purchase price. This plan is available for individuals aged between 30 and 79 years and the maximum deferment period is 12 years.

IRDAI Permits Video Based KYC for General and Life Insurers24 Sep 2020

IRDAI (Insurance Regulatory and Development Authority of India) now allows life and general insurance companies to complete KYC process of customers through VBIP (Video Based Identification Process). This move aims to provide customers with hassle-fr...

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IRDAI (Insurance Regulatory and Development Authority of India) now allows life and general insurance companies to complete KYC process of customers through VBIP (Video Based Identification Process). This move aims to provide customers with hassle-free on-boarding services during the ongoing pandemic, and to enhance the digitisation of the insurance industry in the country. Insurers may use video-based KYC for continuation, verification or establishment of customer relationships after obtaining consent from individuals.

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