Different Types Of Insurance Plans

Insurance is a legal agreement between a person and an insurance company in which the insurer promises to offer financial protection (The total insured) against unexpected disasters for a set fee (price). The many types of insurance policies available today can be classified into two groups:

• Life Insurance
• General Insurance

1. General Insurance

Some of the general insurance types offered in India are as follows:

• Health Care Coverage
• Automobile Insurance
• Homeowners’ Insurance
• Insurance against fire
• Insurance for Travel

2. Life Insurance

Life insurance comes in many different kinds. The most common forms of life insurance policies available in India are the following:

• Term Life Insurance
• Unit-Linked Insurance Plans
• Whole Life Insurance
• Endowment Plans
• Child Plans for Educations
• Retirement Plans

Let’s take a deeper look at the different types of insurance policies:

General Insurance:

General insurance plans are one type of policy that provides coverage in the form of the amount insured for damages other than the policyholder’s death. In general, general insurance refers to a wide range of insurance products that provide financial protection against losses caused by liabilities such as a bike, car, home, or health. Here are some examples of general insurance policies:

• Health Care Coverage

Health insurance is a type of insurance that covers the costs of medical treatment. Health insurance policies either cover or reimburse the cost of treatment for any specified condition or accident. Different types of health insurance cover a wide variety of medical expenses.

It often offers protection against:

• Inpatient care
• Critical illness treatment
• post-hospitalization medical bills
• Procedures for day-care

A few health insurance plans additionally cover resident care and pre-hospitalization expenses. The following are some of the several kinds of health insurance policies available in India:

• Individual Health Insurance: Provides coverage to a single person.
• Family Floater Insurance: This sort of insurance covers your entire family under one policy, which often includes the husband, wife, and two children.
• Critical Illness Coverage: A type of health insurance that covers a wide range of life-threatening illnesses, including stroke, heart attack, renal failure, cancer, and other similar conditions. When a policyholder is diagnosed with a serious disease, they receive a lump-sum payment.
• Senior Citizen Health Insurance: These insurance policies are intended for individuals above the age of 60.
• Group Health Insurance: This is a type of insurance that a business provides to its employees.

Automobile Insurance:

Motor insurance is a type of insurance that provides financial assistance if your vehicle is involved in an accident. In India, there are numerous forms of automobile insurance coverage available, including:

• Car Insurance: This strategy applies to privately owned four-wheelers. There are two types of car insurance plans: third-party insurance and extended coverage policies.
• Bike Insurance: These are types of automotive insurance that cover privately owned two-wheelers in the event of an accident.
• Commercial Vehicle Insurance: A type of auto insurance that protects any vehicle used for commercial purposes.

Homeowners’ Insurance:

A homeowner’s insurance policy, as the name implies, covers all of your property’s belongings and infrastructure against physical destruction or damage. In other words, house insurance protects you against natural and man-made disasters like fire, earthquake, tornado, burglary, and robbery.

The following are examples of several types of house insurance policies :

• Home Building Insurance: Serves to protect the house’s foundation from damage in the event of a disaster.
• Public Liability Coverage: Protects the insured homeowner against any damage caused by a guest or third party while on the property.
• Standard Fire and Special Perils Policy: Protection from fires, natural disasters (e.g., earthquakes, landslides, storms, and floods), and anti-social human-caused activities (e.g., strikes and riots).

Life Insurance:

Life insurance protects against unexpected events like death or incapacity. Along with financial stability, many life insurance plans allow policyholders to improve their investments by making monthly payments to equity and debt funds.

Life insurance can protect your family’s finances from life’s ups and downs. Your family will receive a large sum from the insurance if you die. You can choose the life insurance policy length, coverage, and payment based on your finances. Life insurance coverage come in numerous forms:

• Term Life Insurance
• Unit-Linked Insurance Plans
• Whole Life Insurance
• Endowment Plans
• Child Plan for Educations
• Retirement Plans

Term Life Insurance

• Term insurance is the purest and cheapest sort of life insurance, allowing you to pick high coverage for a certain duration. Protect your family’s financial future with a low-cost term life insurance policy (term insurance policies have no cash value and lower premiums than other life insurance products.)
• If you die during the policy time, your nominees will receive the agreed sum Assured, depending on the payment type you choose (some term insurance plans offer numerous payout alternatives).

Whole Life Insurance

• Whole life, or ‘conventional’ life insurance, covers the insured for life (usually until age 100), unlike other life insurance plans that only cover a certain number of years.
• Besides paying a death benefit, a whole life insurance policy saves and builds cash value. Whole life insurance matures after 100 years. Life insurance policies become matured endowments if the insured lives past maturity.

Endowment

• Endowment plans provide financial protection against life’s dangers and allow policyholders to save over time. If the policyholder survives the term, the endowment matures and pays a lump sum.
• Life insurance endowment policies pay your beneficiaries the full sum assured if you die.

Unit-Linked Insurance Plan (ULIP)

• One-contract ULIPs combine investing and insurance benefits. A Unit Linked Insurance Plan invests part of your contribution in market-linked shares and debt.
• The remaining premium provides life insurance coverage throughout the policy. ULIPs let you allocate premiums to assets based on your financial needs and market risk tolerance.

Plans for Children

• Life insurance kid plans help you financially secure your child’s life goals, such as college and marriage, if you die. Child plans combine savings and insurance to help you prepare for your child’s future needs at the right age.
• Your youngster can use maturity money for financial necessities.

Disclaimer

The essay is intended to be generic and instructive in nature, and should not be interpreted as solicitation material. Before making a purchase, please carefully read the relevant product booklets for exclusions, terms and conditions, warranties, and so on. Consult your financial counselor before making any insurance purchases.

 FAQs

What are the two main types of insurance?

• The two main types of insurance are life insurance and general insurance.

What falls under general insurance?

Some of the kinds of general insurance offered in India are as follows :

• Health Care Coverage
• Automobile Insurance
• Homeowners’ Insurance
• Insurance against fire
• Insurance for Travel

What falls under life insurance?

Here’s what falls under life insurance.

• Term Life Insurance
• Unit-Linked Insurance Plans
• Whole Life Insurance
• Endowment Plans
• Child Plans for Educations
• Retirement Plans

What’s health insurance?

Health insurance is a type of insurance that covers the costs of medical treatment. Health insurance policies either cover or reimburse the costs of treating any ailment or damage. Different types of health insurance cover a wide variety of medical expenses.

What’s a child plan?

Child plans are life insurance policies that assist you in financially securing your child’s life goals, such as further education and marriage, even if you are not there.

Source: bhartaxa