What is insurance? What are the types of insurance ..?
Life has always been full of surprises. Unexpected events can turn our lives upside down at any time. It is wise to anticipate unforeseen events and to prepare ourselves for them. Insurance is such a brilliant endeavor. In simple words, insurance is a wonderful tool to help you deal with risk.
Insurance has long been offered in many forms and methods. This practice was practiced by groups who in ancient times followed the ritual of burying the bodies of the dead. A certain amount was charged from each family in the group. The amount was given to the family of the person burying the body in case of any harm. It was considered a gift for the person in danger. It is considered a primitive insurance. Because for a person at risk, the protection provided by the persons belonging to that group.
In modern times, the group is led by individuals or an organization. They lead this group for profit. The risk-taking insurance company charges a premium from all members of the group, who then pay the actual loss to those who suffer. Then they take his profit and give the remaining amount.
There are generally 3 types of insurance.
Imagine a married couple having minor children. Then, the person earning the income in that family suddenly becomes obsolete and if the assets of that family are not enough to save the future of that family, the future of that family becomes questionable. Then the insurance will save the family. To get insurance coverage, you have to pay a certain amount of premium every year. In times of risk, i.e. while the insured is alive, if the insured dies, the sum insured (plan amount) will be available in total to the insured person’s family. This is considered to be the simplest type of insurance. This is called a term plan.
A) Many times the insurance company will increase the premium amount and invest the difference in it in different sectors on your behalf. The expenses required for the investment will be deducted from the income from that investment and the remaining amount will be repaid periodically (hourly pack) or in bulk (term plan). It is common practice for the insurance company to offer a small warranty in such cases. The amount refunded to the insurer is determined based on the return on investment and the costs incurred by the investment to the insurance companies.
Investing in mutual funds
If the difference is invested in a mutual fund by the insurance company then that type of insurance is called ULIP type insurance. In this type of insurance, there is no guarantee of a refund. Depending on the market situation, the refund amount per person will be decided. In this type of insurance, the insurance is tied to the market situation.
Important man insurance
This type of insurance is usually taken out by the company to cover the untimely death of a key person, i.e. manager or manager of a company.
Mediclaim or Hospital Expenses Compensation Policy is a policy that covers the unforeseen hospital expenses incurred if a person is admitted to the hospital due to illness or accident. This is valid only if admitted to a hospital in India only.
Serious illness insurance
It is the insurance that helps you to cover the loss caused by the most serious illness. For example, it can compensate for the loss of your life due to diseases such as stroke, organ failure, cancer, etc. The amount you insured under this plan will be paid in full, regardless of your medical expenses. Usually this plan only includes diseases that can have serious consequences for you and paralyze your future. This plan is designed to help you with your future interest income from the large amount of money available in this plan.
Daily cash payment plan
This plan will pay you a fixed amount for each day you are in the hospital. The money you get on this plan does not really depend on the cost you incur. This plan will cover the unforeseen expenses incurred by you in the hospital such as transportation cost, attendant cost, loss of your salary etc. Usually these types of expenses are not included in your Mediclaim plan.
Overseas Travel Plan
This plan will usually cover the unforeseen hospital expenses you incur while traveling abroad. This includes losses due to loss of passport or luggage, flight delays, travel cancellations due to illness of relatives or passengers.
Car Insurance You definitely need this plan to cover the damages caused to third parties by your car. This is called a third party car policy. You will definitely need this insurance before paying for your car on the road. A typical car insurance plan covers damages caused by an accident, damage to the car, or loss due to theft. It can also include various plans to help change the car due to the loss of another driver, fellow passengers and the cause of the accident.
Real Estate Valuation Plan
The plan will generally cover the loss of your home, property, furniture and consumer equipment due to fire, flood, earthquake, lightning, etc. The plan also includes damage to electrical equipment due to theft, robbery and sudden electrical stress.