This is precisely what ‘insurance’ provides. In layman terms, insurance is a fallback option in case of an unforeseen disaster, accident, emergency and the likes. Being insured basically means that a person is financially protected from the repercussions of any unexpected event that may burn a hole in his or her pocket by way of steep medical bills. These policies work on a very simple principle: a person pays the insurance provider a certain amount (premium) and in return, the insurance provider safeguards his or her assets, both physical and material, by providing him or her with a pre determined financial cover in case of any damage or threat to those assets.
Why should Insurance be considered?
The reasons are pretty obvious:
- Whether the individual is an independent young adult or part of a family, financial security is without doubt the topmost priority. Insurance is a solution that provides safety against most financial risks.
- These policies cover all types of assets such as automobiles, property, and equipment against natural or manmade disasters, theft and even terrorist attacks.
- Insurance is a sound method of investment.
- Indian law treats these instruments as a credible savings vehicle exempting insurance premiums from taxation within specific limits. Hence, the benefits are twofold. Insurance acts as the savings component of financial planning and the tax relief encourages further savings.
- Certain types of insurance policies are also valid as securities against loans.
- Also, insurance is mandatory under Indian laws, in certain cases such as automobiles.
With the opening of the Indian insurance sector to private players in 2001, the sector is one of the fastest growing and competitive and hence consumer friendly. Furthermore, the variety that any interested buyer would find in the market would result in him or her to conduct research to better understand the best policy of his self or herself.
The different types of insurance available in the Indian market are:
- General Insurance:There are various sub categories within such a Medical Insurance, Health Care Insurance, Critical Illness Insurance, Travel Insurance, NRI Insurance, Accident Insurance and Personal Accident Insurance.
- Auto Insurance: These policies are further subdivided into Two Wheeler Insurance, Commercial Vehicle Insurance and Car Insurance.
- Commercial Insurance: These policies include Agriculture Insurance, Industrial Insurance, Fire Insurance, and Marine Insurance. Marine insurance also has variants comprising Hull Insurance, Cargo and Freight Insurance.