Cash if you die, cash if you don’t. Everyone says to buy a house, buy gold, buy a plot so that there is an investment for the future, but no one says to take insurance. Insurance covers all the losses we face. Suppose there is a fire in the house or a car meets with an accident and if we have the insurance, then our loss will be compensated. Insurance helps to cover all the risks. So let’s talk about insurance. Are you guys ready?
WHAT IS INSURANCE?
Insurance is a legal agreement between two parties i.e. the insurer and the insurance company. Insurance means protection from the coming dangers. Insurance is a medium to cover the risk of your life. According to this agreement, when any individual gets his insurance plan done with the aid of the insurance company, then the insurance plan company does the whole loss in the coming time. Insurance is a contract, represented by a policy, in which a policyholder receives economic protection or compensation in opposition to losses from an insurance plan company.
HOW INSURANCE WORKS?
When you purchase insurance, you make payments to the company. These payments are referred to as ‘premium’. In exchange, you are covered from certain risks. The company agrees to pay you for the losses if they occur. The insurance company has many clients. Insurance is based on the thought that spreading the risk of a loss such as theft or fire, among many people makes the risk decrease for all. When a loss happens, every client get insurance money to pay for the loss.
BENEFITS OF INSURANCE
It offers you a financial assurance for your losses and damage. The fundamental function of all types of insurance plan coverages is to provide damage manipulate to the insured by bringing in a lot of people who pay to cowl their risks. Insurance plans are very helpful to anyone looking to guard their family,assets/property and themselves from the financial risks. It also helps to cover all medical expenses and to meet with any emergency situation as well.
TYPES OF INSURANCE
There are two vast kinds of insurance.
- LIFE INSURANCE
- GENERAL INSURANCE
LIFE INSURANCE:
Life insurance is a contract that offers financial compensation in the event of death or disability. Some life insurance plans may provide financial benefits upon retirement or a predetermined amount of time. It helps you to secure your family’s monetary security even in your absence. While acquiring a life insurance policy, you can choose to pay the insurer in one single sum or over time. They are referred to as premium. In exchange, your insurer promises to pay a certain amount to your family in the match of death,disability or a set amount of time.
LIFE INSURANCE CAN BE CLASSIFIED INTO VARIOUS WAYS-
- TERM INSURANCE: It is the most simple type of insurance. Your family receives a lump- sum amount in the case of your death. If,however,you continue to exist 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 cash after your death.They will also be entitled to a bonus that regularly accrues on such amount.
- ENDOWMENT POLICY: Like a time period policy, it is also legitimate for a certain period.A lump-sum quantity will be paid to your family in the tournament of your death.Unlike a term plan, you get the maturity proceeds after the time period.
- MONEY BACK POLICY: A sure percentage of the sum guaranteed will be paid to you periodically throughout the time period as a survival benefit.After the expiry of the term, you get the balance quantity as maturity proceeds.
- CHILD PLAN: This ensures your child’s financial security.In the event of your death, your child gets a lump-sum amount.The insurer can pay the premium quantities after your death.Your child will proceed to get a certain sum of cash at specific intervals.
- PENSION PLAN: This helps construct your retirement fund.You can get a regular pension quantity after retirement. In the case of your death, your family can declare the sum assured.
GENERAL INSURANCE:
A general insurance is a contract that gives financial compensation on any loss other than death. It insures everything aside from life. A general insurance plan compensates you for financial loss due to liabilities associated with your house, car, bike, health, travel, etc. The insurance employer promises to pay you a sum certain to cover damages to your vehicle, medical treatments to remedy health problems, losses due to theft or fire, or even financial problems in the course of travel. Simply put, a general insurance plan offers economic protection for all your belongings against loss, damage, theft, and different liabilities.
GENERAL INSURANCE CAN BE CLASSIFIED INTO VARIOUS WAYS-
- HEALTH INSURANCE: This kind of general insurance plan covers the cost of clinical care. It pays for or reimburses the quantity you pay towards the cure of any injury or illness.
- MOTOR INSURANCE: This kind is for your automobile or bike what health insurance plan is for your health.It is a general insurance plan cover that affords financial safety to your vehicles from loss due to accidents, damage, theft,furnace or natural calamities.
- TRAVEL INSURANCE: A travel insurance compensates you or can pay for any financial liabilities bobbing up out of medical and non-medical emergencies at some point of your travel overseas or within the country.
- HOME INSURANCE: Home insurance plan is a cover that can pay or compensate you for damage to your domestic due to natural calamities, man-made failures or other threats.
- FIRE INSURANCE: Fire insurance plan pays or compensates for the damages brought on to your property or goods due to fire.It covers the replacement, reconstruction or restore expenses of the insured property as properly as the surrounding structures.
FAQs
- WHO SHOULD BUY TERM INSURANCE POLICY?
ANS. Term Insurance affords financial safety for your family, when you are not there to return them. If you are the sole earning member of the family, it is pretty essential for you to tightly close the future of your family with a time period plan. As it is the pure protection plan, it comes with low top class rates and excessive sums assured.
- WHAT IF I LOSE MY PASSPORT?
ANS. Loss of passport is included in an international tour insurance policy.
- IS PREMIUM PAID FOR HEALTH INSURANCE POLICY TAX EXEMPTED?
ANS. Yes,premium paid for health insurance policy tax is exempted.
- WHAT IS A DEDUCTIBLE?
ANS. It is the deductible quantity that has to be borne by the insured at the time of a claim. The deductible is relevant for medical expenses, dental treatment, loss of passport or documents, delayed checked baggage, hijack misery allowance, etc..
- WHAT IS AN ENDORSEMENT?
ANS. An endorsement is a written proof of an agreed change in the policy. It is a report that incorporates modifications in the terms of the policy.
Thank you very much for taking out your precious time to examine this post.
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