The word Insurance is very familiar to us. but many of us don’t have a deep idea about it. there are different types of Insurance are there for different purposes. for example, life, health, vehicle insurance, etc. In this post, we will discuss What is Insurance and its types and importance.
also read: What is Term Insurance?- All you need to know
What is Insurance
Insurance is a financial tool for protecting you from a financial loss. An insurance policy is a legal agreement between two parties, one is the insurer, company and the other is the policyholder. if any unexpected events like death or medical issues happen to you the insurance policy will help you financially. in case of the policyholder’s death, the benefits from the policy will help your family for their future. in the case of medical issues. the health policies will help you to meet your medical expenses. there are different types of insurance for different purposes. All policies and companies are monitored and regulated by the Ins Regulatory and Development Authority of India(IRDAI). so you don’t need to worry about the transparency and legitimacy of the policies and plans. but make sure you are purchasing a genuine policy plan from a genuine insurance firm.
Importance
- Protection for you and your family
- To enjoy financial security
- Reduce stress during difficult times
- Peace of mind
- A legacy to leave behind
Need for Insurance
- Policies will help you to pay for your medical emergencies, including the hospitalization and medication of any illnesses and treatment.
- The family can clear all the debts like loans (if there any), after the unexpected death of the policyholder.
- policies help your family to maintain a standard of living in case of your sudden death. This will help your family to cover the costs of running the household and daily life through the insurance lump sum payout.
- The insurance amount will give your family big support for raising your kids and their future expenses.
- It plans will help to secure your children financially.
- Many modern policies are coming with savings and investment schemes along with regular coverage. These types of plans will help you to create wealth for the future through regular Investment.
- It helps protect your home and properties in case of any unexpected natural calamity or damage. Your home plan will help you get coverage for damages to your home and pay for the cost of repairs or rebuilding, whichever is needed.
Types of Insurance
Following are the major Type of insurances in India
Life Insurance
As the name Implies, Life insurance is insurance on your life. a life scheme is a contract between an insurance company and the policyholder. policyholder makes the premium payments and the company returns a lump-sum amount.it will make sure your dependents(family) are financially secured even after your demise. there are different types and different policies are available according to your needs.
Vehicle Insurance
Vehicle policies will help you to cover the damage and other accident issues that happen to your vehicle. also, it will cover the damages due to natural calamities. it is a ‘must’ in India. if you are owning a vehicle, car, bike, or any. you must take a vehicle policy. unlike other policies. it is a must in the case of Indian transport rules. every vehicle owner should have valid policy.
Health Insurance
Health policies covers medical costs for expensive treatments. Different types of health policies are available. you can choose a plan according to your need and plan. The premium amount paying for a health policy is usually covering the treatment, hospitalization, and medical costs.
Home Insurance
Home policies will help you for covering loss or damage caused to your home due to accidents like fire and other natural calamities. taking home plan is a good idea if your home is in nature sensitive places.
Child plans
The child plan is savings instruments that help in making lump sum funds for the children’s future. the plan will mature when the children reach a certain age for pursuing higher studies or their marriage. In these plans, parents will be the policy owners.
Final Thoughts
In the present lifestyle, Ins, policies are unavoidable. we all will have any of the policies that we discussed above. it becomes so important in our life because of the above-mentioned reasons. we should make a detailed study of the policy plan before purchase one. also, never depend on the policy advisor’s words only. you should have good knowledge about policies and plans. in this post, we discussed the basics of policies and its importance. I hope this post will help you to understand the basics.
Happy investing
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