Types of Insurance - 1. General: ✓ Health Insurance ✓ Motor Insurance ✓ Travel Insurance ✓ Home Insurance ✓ Fire Insurance 2. Life Insurance: ✓ Term Life ✓Money-back Policy ✓ ULIP ✓ Pension Plans
Risk is everywhere: When you drive your car to work, when you visit a new country, when you ride your bike to a nearby shop, when there’s a new bug going around in town.
Scenario 1 Scenario 2 Scenario 3 Scenario 4Your childhood friend suddenly meets with an accident. He passes away, leaving behind a wife, two kids and one elderly parent. You catch a cold. But work keeps you busy. Eventually, the cold worsens into Pneumonia. You need to be admitted in the ICU for a week. You are going to Spain for the first time. You have a stop-over at Abu Dhabi. Your first flight gets delayed. You miss the second flight and get stuck. You are driving to work like every other day. But the road has oil spill. A car spins out of control and hits yours. Your bumper and headlights get hurt.Your friend had minimal savings, barely enough to cover two months’ expenses. It costs you Rs. 60,000 for the hospital charges. And Rs. 10,000 for the treatment. It costs Rs. 28,000 to fly to Spain. Rs. 20,000 to return to India. Plus, the loss from hotel booking cancellations. Your bumper costs Rs. 10,000 to repair. The headlights another Rs. 7,000.A Rs. 7,500 life insurance could have ensured they had Rs 10 lakh in hand.A Rs. 3,500 health insurance could have ensured you paid 0 from your pocket. A travel insurance worth Rs. 500 could have helped pay the travel bills. Rs. 7,500—that’s how much a car insurance costs every year which could have paid for the damages.
Life insurance is a contract that offers financial compensation in case of death or disability. Some life insurance policies even offer financial compensation after retirement or a certain period of time. Life insurance, thus, helps you secure your family’s financial security even in your absence. You either make a lump-sum payment while purchasing a life insurance policy or make periodic payments to the insurer. These are known as premiums. In exchange, your insurer promises to pay an a-sured sum to your family in the event of death, disability or at a set time.
Term Insurance -It is the most basic type of insurance.
-It covers you for a specific period. -Your family gets a lump-sum amount in the case of your death. -If, however, you survive the term, no money will be paid to you or your family.Whole Life Insurance -It covers you for a lifetime. - Your family receives a certain sum of money after your death. -They will also be entitled to a bonus that often accrues on such amount.Endowment Policy -Like a term policy, it is also valid for a certain period. -A lump-sum amount will be paid to your family in the event of your death. -Unlike a term plan, you get the maturity proceeds after the term period.Money-back Policy -A certain percentage of the sum a-sured will be paid to you periodically throughout the term as survival benefit. -After the expiry of the term, you get the balance amount as maturity proceeds. -Your family gets the entire sum a-sured in case of death during the policy period. This is regardless of the survival benefit payments made.Unit-linked Insurance Plans (ULIPs) -Such products double up as investment tools. -A part of your premium goes towards your insurance cover. -The remaining amount is invested in Debt and Equity. -A lump-sum amount will be paid to your family in the event of your death.Child Plan -This ensures your child’s financial security. -In the event of your death, your child gets a lump-sum amount. -The insurer pays the premium amounts after your death. -Your child will continue to get a certain sum of money at specific intervals.Pension Plans -This helps build your retirement fund. -You can get a regular pension amount after retirement. -In the case of your death, your family can claim the sum a-sured.
A general insurance is a contract that offers financial compensation on any loss other than death. It insures everything apart from life. A general insurance compensates you for financial loss due to liabilities related to your house, car, bike, health, travel, etc. The insurance company promises to pay you a sum a-sured to cover damages to your vehicle, medical treatments to cure health problems, losses due to theft or fire, or even financial problems during travel.
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