Insurance Sector has evolved through many phases in India. From privatization to e-account, many changes have been brought to the insurance sector to make it more effective and to cover more number of people. The efforts made by IRDAI Guidelines and Government has shown positive numbers in the insurance sector. Penetration rate has increased in India from 2.32% to 5.51 % and now 17% of the total population in India is covered under the insurance policy. While we are still very far behind than the other countries, but progress has been consistent. there are different types of insurance policy in India under Life Insurance and general insurance categories.
The product portfolio of insurance sector has also been widened to provide a wide range of options for customers to choose from and to get cover for most of the things. Now insurance can be divided into two categories, General Insurance and Life insurance. Life insurance is the insurance of a person’s life, so if the policyholder dies, his family would be paid the benefit while general insurance is a non life insurance. So we will try to understand the different types of insurance in India under these two categories, through this article
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General insurance
Health Insurance
Health insurance policy is a type of general insurance, which covers your medical and surgical expenses. You can either avail cashless treatment at the network of hospital or can reimburse it later through claim. With the rising prices of health care and uncertainties of life, health insurance has become a necessity in today’s world. The premium amount in health insurance policy is mainly based on your age and medical condition. Generally, health insurance companies ask for a medical check up before buying a health insurance policy.
Home Insurance
Home insurance policy is a type of property insurance, which provide cover for the content and structure of your home including prized possession also. You can get additional cover for theft, burglary, earthquake, etc. also, under your home insurance policy. The Home insurance policy is not only limited to owners, but some health insurance companies provide cover for tenant also. The premium amount offered in home insurance policy is comparatively lower than other policies, but the benefits are many.
Motor Insurance
Motor insurance policy provides cover to the owner of the vehicle in case of financial loss occurring due to theft or damage to his vehicle. In India, third party motor insurance is compulsory in which damage caused to the third party or property by your vehicle is covered. You can get motor insurance for two wheeler, car, commercial vehicle or any
other road vehicle. There is also a comprehensive cover under motor insurance, which provides cover for third party, own damage to vehicle and bodily injury also.
Travel Insurance
A Travel insurance policy provides cover for travel emergencies like medical attention, loss of luggage, financial loss due to cancellation or delay of trip, etc. There are different types of travel insurance policies which are based on purpose, frequency and destination of travel. By having a travel insurance policy, you can travel to anywhere without any worries.
Life insurance
Term Life Insurance
A term insurance policy is a pure life insurance policy which gives you the option to choose your policy term according to your need. It is considered as the most economical way of buying a life insurance policy because it offers a very low rate of premium amount with high cover. A term insurance policy doesn’t provide any maturity benefit to the insured person and sum assured is given on the death of the insured person. That’s why there is no saving and investment option in Term Insurance policy.
Permanent Life Insurance
A Permanent life insurance policy is for your whole life. In this policy, the policy term is not defined, so you can enjoy the cover throughout your life. You have to pay a regular premium until your death and then the sum assured is given to your family. But even if you survive the policy term, you get a maturity benefit under your permanent life
insurance policy.
Unit Linked Insurance Policy (ULIP)
Unit Linked plan offers you dual benefits of cover for life and investment option. You can link your money of ULIP into various stocks, bonds, equity and earn profit according to the market trend. In case of death, lump sum amount is paid to the family while upon survival of the policy term, the entire value of fund is given.
Money Back Policy
Money back policy offers you to receive a part of the sum assured on a regular interval, but only if the insured is alive. Upon survival of the policy term, the insured person gets the remaining amount of sum assured in the form of maturity benefit. Upon the death of the policyholder, a lump sum amount is given apart from money back.
Endowment plans
You can have both the benefits of saving and insurance under an Endowment plan. A lump sum amount is paid in case of death or maturity, whichever happens first. You can opt this plan for a routine saving through which you can achieve your financial goals very easily.
So you have a wide range of insurance policies to choose from and each policy provides unique benefits to the buyer. With he increase in the type of insurance, it becomes very necessary to understand each policy at a glance, so that you can make a well informed decision.