Insurance
All About Non-Life Insurance Policy And How It Works
There is so much you might desire to do in your life. However, there is nothing in your life that you can predict with certainty. Also, there are certain things you desire to happen without any compromise. For example, you want your children to attend a good college.
Given the uncertainty of life, if an awful incident occurs, your goal may be shattered. There is a way to protect yourself against life’s uncertainties: purchase a life insurance policy. It brings you comfort and stability in life.
Similarly, if you’re planning an international trip, you want your luggage to arrive safely. If it does not, you should receive a claim in return. You can accomplish this by purchasing a non-life insurance policy.
Also Read – Whole Life Insurance Policy
Based on the facts provided above, insurance can be divided into two categories. The following table can help you comprehend the difference.
| Parameter | Life Insurance | Non-Life Insurance |
| Definition | In life insurance, you are covered for risks associated with your life. The insurance company promises to pay you a sum assured if an unfortunate event. | You protect your valuable things through general insurance. The insurance company compensates you for the damage or loss of the thing insured. |
| Purpose | Life insurance, in general, is considered an investment. | General insurance is an indemnity contract where the insurer promises to pay you in case of damage or loss of your property. |
| Period | Long term | Short term |
| Who benefits? | The policyholder receives the benefits on maturity. In case of the policyholder’s demise, the sum assured is received by the nominee. | The benefits go to the policyholder and other people insured under the insurance. |
| Policy cost | The cost of life insurance depends on multiple factors – your current age and the sum insured. | The policy costs depend on the value of the insured asset. |
When do you Need a Non-Life Insurance Policy?
Non-life insurance, often known as general insurance, protects assets such as cars, homes, trips, and accidents. Life insurance is a must for everyone. It safeguards you and your loved ones in several ways. Similarly, non-life insurance is required depending on your lifestyle. However, health insurance is a non-life insurance policy that everyone should obtain.
Let us look at the non-life insurance types to understand the need for it:
| Individual Non-Life Insurance | Corporate/Group Non-Life Insurance |
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Major treatments are expensive in India. In the event of a medical emergency, all of your funds may run out rapidly. Health insurance is required to ensure that you do not lose all of your investment in the event of a medical emergency.
It is an indemnity plan that will cover your hospitalization expenditures up to the sum assured. You can purchase individual health insurance policies or a single policy that covers your entire family.
Motor insurance is required for vehicle and motorcycle drivers. It protects your car from theft, accidents, and damage. Comprehensive and third-party motor insurance exist. Third-party insurance covers third-party damages in the event of a vehicle accident. It doesn’t cover auto damage.
Your vehicle is fully covered by comprehensive motor insurance against floods, riots, etc. You can also add personal accident and third-party liability coverage.
This is essential for international aviation travel. Losses from lost baggage, trip cancellation, and aircraft delays are covered. If you become hospitalized while traveling, certain travel insurances cover it.
Home insurance protects your home and belongings, as the term implies. It covers natural and man-made calamities.
How to File Claims for Non-Life Insurance Policies?
Type of non-life claim determines claim process. Health insurance claims differ from motor claims in process and documentation. How to file a health insurance claim:
- Get all the receipts and bills from the hospital and arrange them properly.
- Ask for a claim form from the health insurance company or download it from their website.
You need to submit the original policy document, claim application form, hospital certificate, etc. Check the insurance company site and get the list of all documents required. - Keep the copy of the original documents with you. In case the original documents get misplaced, they will be handy.
- File the claim online or offline with all the documents.
Things to Consider while Buying Non-Life Insurance Plans
The first thing you should be clear about is the non-life insurance you want to buy and the reason for it. The other important points to consider are:
| Sum Insured | Check for the insured declared value (for motor insurance) or the sum insured offered. It is the maximum amount you can claim under the insurance plan. Chose an insurance plan offering maximum sum assured with an affordable premium rate. |
| Premium amount | Look at the premium you have to pay (monthly for health insurance or one time for motor) and the corresponding sum assured you are getting. |
| Benefits | Check the various benefits the insurer is giving you under the plan. Some of the benefits you must get are zero paperwork, cashless garages, no pre-policy health check, etc. |
| Claim settlement ratio and time | Check the Incurred Claim Ratio (ICR) of a general insurance company. It will tell you how many claims the company processes for every 100 claims submitted. You should also check the speed at which claims get processed. |
| Documents | Read the policy document and look at the fine prints. If there is any point you don’t understand, get it clarified before buying non-life insurance. |
You need life and general insurance to cover all elements of your life. Consider your needs and choose the best plan in each category to secure your life
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