How many types of insurance are there?

By | August 30, 2022

 Insurance means insurance, a cornerstone of financial planning in which you, your dependents and your assets are protected against financial loss due to future untoward event or circumstance, through this blog post we will discuss in detail how much insurance is. What are the types? Will throw light about insurance ke prakar.

 The concept of insurance is very simple. You pay a fixed amount called premium to the insurer. In lieu of which one provides coverage and pays a pre-determined amount for future damages.

 Friends, on the basis of your insurance cover, insurance is divided into life insurance and general insurance. Through our article, you will be explained in detail about both these types of insurance and their various aspects. Hope you will definitely read our post from beginning to end.

What is Life Insurance?

Life insurance is one of the most important financial tools which can help your family to remain financially independent, clear the liabilities taken in the form of debt, maintain the lifestyle and keep the important goals of life on the right track. Helps to a high level.

 In life insurance, in case of premature demise of the policyholder within the policy term, the insurance company pays the sum assured to the family of the nominee.

Types of life insurance

1. Whole Life Insurance –

 It is a type of insurance plan. Which provides a protection for your whole life. The term of the insurance policy for such plans is around 100 years. As long as the premium of such a policy is paid, the benefits of the policy remain intact. If one wants to maintain this insurance plan for life, then taking whole life insurance plan is a very good option.

 2. Term Life Insurance –

 Term life insurance is a pure protection plan that offers a great deal of coverage at an affordable premium. In Term Insurance, the sum assured is paid by the insurance company in case of death of the insured within the stipulated period of the policy. The sum insured received helps the insured’s family to meet their daily expenses and pay off the loan. Term plans allow one to choose the Sum Assured of 15-20 times the annual income.

 3. Endowment Plan –

 Endowment plan is an investment in a single product and a plan of insurance that covers the life as well as works towards the essential life goals. In this plan, a certain part of the premium goes as Sum Assured, while the rest is invested in a less risky avenue i.e. a business.

 In case of death of the insurer during the term of the insurance policy, the nominee of the insurer receives the sum assured. This endowment plan meets the needs of both insurance and investment simultaneously.

4. Money-Back Policy –

 In this plan a fixed amount is paid out at pre-determined intervals during the term of the insurance policy, the rest are similar to insurance with money back policy endowment plans. For example, if a money-back policy is taken for a term of 20 years, a certain amount can be paid at the end of the 5th, 10th and 15th year of the policy term, and on completion of this policy, the accumulated With the bonus the entire profit is paid out.

 5. Unit Linked Insurance Plans (ULIPs) –

 In this too, like endowment plans, a certain part of the premium goes towards providing life cover and another part is invested in the markets to earn returns. These plans provide an opportunity to earn capital from capital by investing in a single product and investing in insurance as well as life cover and a variety of riskier funds.

 A ULIP plan works like a money back insurance plan, and also provides the facility of switching, that is, investing from one fund to another.

What is General Insurance?

General insurance, unlike life insurance, includes insurance for non-living property such as home, vehicle, health, travel, flood, fire, theft, road accident and man-made calamities.

1. Home Insurance –

 A home insurance policy protects your home and its belongings from damage caused by human beings and natural calamities. Friends, some home insurance policies give you coverage for temporary rent expenses during your home renovation.

 2. Motor Insurance –

 As the name suggests, this insurance is for vehicles, which provides you coverage in case of vehicle accident, damage to the vehicle, theft of the vehicle, vandalism with the vehicle, etc.

 There are two types of this insurance, third party and comprehensive, in which third party motor insurance takes care of third party damages in case of an accident with someone caused by your vehicle. As per the Motor Vehicles Act, 1988, it is mandatory for every vehicle plying on the road to have third-party insurance.

 Comprehensive motor insurance policy, on the other hand, covers you from both third party damages and own damages, on damages caused due to flood, fire, riot, etc.

 3. Travel Insurance –

 If you are traveling abroad, a travel insurance policy covers you against damages due to loss of baggage, flight delays and trip cancellations. In some cases, if you are admitted to the hospital during travel, then due to travel insurance, you get complete treatment in the hospital by the insurance company.

 4. Health Insurance –

 Health insurance covers out-of-pocket expenses in case of a medical emergency. A health insurance plan is an indemnity plan that pays for hospitalization expenses.

 In this plan, an insurance policy for the entire family is also done together, which provides coverage for the treatment of any member of the family. On the other hand, critical illness plans which are fixed benefit plans provide a large sum of money for diagnosis of a particular type of illness.

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