Understanding Different Types of Insurances

Types of Insurance Policies

Insurance policies are divided into two groups, namely, life insurance and general insurance. Under these two segments, there are different types of policies available. Let's have a quick look at various types of insurance that you can invest in today!

1. General Insurance:
   General insurance covers all the essential things apart from the life of the policyholder. Under general insurance, you can insure any valuable asset they hold, such as a vehicle, home, mobile phone, etc. It also covers the health of the individuals. The purpose of general insurance policies is to provide financial aid to the policyholder in times of crisis.
   
   For instance, health emergencies can pose financial limitations on people. In such times, having health insurance can help them cope with the medical expenses. There can broadly be 5 types of general insurance policies. These are:
   
   Health Insurance:
   Health insurance is a type of general insurance cover that covers the medical expenses of the insured. Depending on the type of health insurance plan chosen, the coverage may differ. Common types of health insurance plans include maternity health plans, family floater insurance, and individual health plans.
   
   Motor Insurance:
   Motor insurance is meant for motor vehicles. It can be any type of motor vehicle, including private and commercial vehicles. In India, according to the Motors Act of 1988, having third-party insurance is mandatory for all motor vehicles. Common types of motor insurance are comprehensive plans, standalone insurance, and third-party cover.
   
   Travel Insurance:
   People planning a trip abroad or even in India can invest in travel insurance. It covers the cost of medical emergencies, document loss, delayed flights, and more.
   
   Home Insurance:
   A tenant or a homeowner can invest in home insurance. It provides financial assistance if the home suffers structural damage, loss, fire, burglary, and more.
   
   Fire Insurance:
   Loss and damage to properties or goods due to fire are covered under fire insurance plans. The insurer compensates for the loss by repairing, replacing, or financial compensation for the loss.
2. Life Insurance:
   As the name may suggest, life insurance policies cover the life of individuals. In the unfortunate event of death of the life assured, the nominee receives a lump-sum death benefit. The purpose of a life insurance policy is to provide the family with much-needed financial support even in the absence of life assured. Life insurance policies become a must for families that have a sole earning member.
   
   Term Insurance:
   Term insurance is the purest life insurance that provides a guaranteed death benefit to the nominee if the life assured passes away during the policy tenure.
   
   Whole Life Insurance:
   Whole life insurance is a policy that covers the life assured until 99 or 100 years of age. The family receives death benefit if the life assured dies during the tenure.
   
   Endowment Policy:
   An endowment plan is similar to a term insurance plan where the nominee receives a death benefit if the life assured dies during the policy tenure. However, unlike the term plan, if the life assured outlives the tenure of the endowment policy, the life assured receives maturity benefits.
   
   Money-back Policy:
   In a money-back policy, the life assured receives regular payment as a survival benefit until the policy tenure. However, in case of the death of the insured, the family received the death benefit. Upon surviving the policy tenure, the life assured receives maturity benefit.
   
   Unit-linked Insurance Plans (ULIPs):
   People looking for investment and life insurance under one plan may choose ULIPs. A part of the premium is invested in equity/debt, and the rest is used to provide life insurance coverage.
   
   Child Plan:
   As the name suggests, a child plan is designed for parents who wish to secure their child’s future. Here, there is an option to get lump sum payouts at predecided time intervals, which could be milestones in a child’s life. From higher education to a dream wedding, you can plan it all with a child plan.
   
   Pension Plans:
   Pension plans provide regular income after retirement of the life assured. However, in case of their death, the spouse/ family may receive death benefits.

Importance of Opting for Insurance Policies

Most insurance policies are not compulsory in India. However, having these financial protections only benefits you in the long run. Let's understand the importance of insurance policies:

1. Life insurance:
   Life insurance provides death benefits to the family of the life assured. So, people who are the sole breadwinner in the family may invest in a life insurance policy.
   
   Those of you who wish to protect your families against any unforeseen situation wherein you may not be around to provide for them and hence create a pool of funds for your loved ones must opt for it. Life insurance is like making a safety net for your family.
2. Health insurance:
   Amid the rising cost of medical treatment, health insurance has gained tremendous impetus. In a single stance of hospitalisation, people may lose a major chunk of their savings. To avoid such a situation, having a health insurance policy is crucial.
   
   Health coverage also gives you the liberty to avail yourself of quality healthcare services. People of all ages can invest in health insurance, as health crises can be unpredictable to anyone.
3. General Insurance
   Other than health, you may opt for other types of general insurance policies. If you own a vehicle, it is mandatory to have a third-party cover as per the Motor Vehicle Act. However, it is a good idea to opt for a comprehensive car insurance policy to provide coverage for your own vehicle as well, along with third-party legal liabilities.
   
   Similarly, if you own a house, you should opt for a home insurance policy which protects you from fire and theft. Likewise, there are multiple other types of insurance policies for each and every product, which can be availed separately depending on the risk associated with the same.

Conclusion

Insurance policies give you financial freedom in times of need. Whether it is a health crisis, fire at home, loss of a vehicle, or even loss of life, an insurance policy gives you the much-needed financial support needed to tackle the situation. Since life remains unpredictable, having sufficient protection against uncertainties is a must.

For all your general insurance needs, Jio Insurance Broking offers a spectrum of products, ranging from health insurance to bike insurance, from car to life insurance. With Jio Insurance Broking, you may opt for as many insurance policies as you need, and that too in a few easy steps. If you have any further queries, contact Jio Insurance Broking today!