Life insurance is a contract between an insurance policy holder and an insurer, where the insurer agrees to make certain payments to the company. The insurance company agrees to pay a sum of money to a person of your choosing if you die. There are different types of life insurance policies available in market. Here in this article we will provide basic information about some of the most common Insurance Policies.
Insurance is one of the most popular financial instruments that offer savings as well as protection. It is a financial agreement between a policyholder and the insurance company. Taking an insurance policy means the insurer will compensate the policyholder for financial damages occurred to him, against the payment of periodical charges called premiums.
The cost of buying insurance largely depends on the range of coverage and terms of the policy. If a policy covers multiple risk factors, it will be more expensive. Before buying insurance, it is essential to understand its different types, some of which are:
Life insurance: Life insurance policy offers financial indemnity to the beneficiary against the death of the policyholder. Indian insurance companies offer several types of life insurance policies. Life insurance policies are particularly useful for individuals who have dependents or financial liabilities.
Home insurance: This is a type of property insurance that offers financial protection against damage to the building and its contents. Home insurance covers damage due to eventualities such as fire, theft and earthquake. An entire list of such eventualities will be mentioned in the policy disclosure agreement. Home insurance is also called homeowners insurance.
Auto insurance: Since buying auto insurance is a legal requirement in all Indian states, it is also one of the most popular insurance products. Most states also require customers to buy third-party insurance. Third-party insurance ascertains that you have enough finances to pay for damages caused to another person or property. One can also buy collision or comprehensive insurance policies that offer extended coverage. With an ever-increasing number of insurers providing car insurance, it becomes difficult to identify the best. Such situation requires buyers to compare car insurance quotes from different insurers and decide the one that suits them best.
Health insurance: Health insurance provides financial cover against sickness and disability to the policyholder. The Indian government has launched several programs to ensure healthcare facility to low-income families, government officials, veterans and senior citizens. The others may utilize the services of private health insurance providers.
Advantages of Life Insurance
1. Provide financial security to you and your family.
2. Can cover medical, educational, and daily living expenses.
3. Life insurance payouts are not taxable.
4. The best insurance policy can provide liquidity to pay off personal loans or business loans.
5. Life Insurance can help you to retain your Business from the loss of a key employee.
6. Life Insurance can be useful in paying estate taxes, along with other estate settlement amounts.
7. It creates a long-term savings opportunity with a reasonable rate of return.
8. Insurance policy also provides some optional benefits such as critical illness benefits, additional term benefit, accidental death benefit and waiver of premium benefit.
9. Life Insurance helps replace a charitable gift.
10. Insurance gives security to both individuals and businessman.
Read and compare insurance policies carefully. Also, read the list of exclusions and damages that are not covered under the policy, before signing the insurance agreement.