INSURANCE

Vehicle insurance

Vehicle insurance provides the safety of your vehicle which is a beneficial part of today’s life.

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Health Insurance

Home insurance covers a private residence, which can include losses occurring to one’s home.

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Travel Insurance

Travel insurance is intended to cover medical expenses and other losses incurred while traveling.

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Home Insurance

A home insurance policy that combines various policies protections, can include losses occurring to one’s home.

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Life Insurance

Life insurance is a contract between a policyholder and an insurer or assurer, upon the death of an insured person.

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Crop Insurance

Crop in India is highly susceptible to risks like droughts and floods. It is necessary to protect the crop.

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INSURANCE

As we all know that Insurance is an agreement by which the state or a company undertakes to provide a guarantee of cover for death, specified loss, damage or illness in return for payment of a particular installment. Insurance policies help individuals to make things easy in their life. One of the main help that these policies offer to its customers is financial cover and helps them to make their life much better and efficient. Basically people look for life insurance, property insurance and health insurance. Most common reason to go for these insurance policies is to have another option in case of financial emergency. In modern era as people are facing different type of issues related to their health, property, education and several other problems.

HOW DOES INSURANCE WORK?

The insurer and the insured get a legal contract for the insurance, which is called the insurance policy. The insurance policy has details about the conditions and circumstances under which the insurance company will pay out the insurance amount to either the insured person or the nominees.Insurance is a way of protecting yourself and your family from a financial loss. Generally, the premium for a big insurance cover is much lesser in terms of money paid. The insurance company takes this risk of providing a high cover for a small premium because very few insured people actually end up claiming the insurance. This is why you get insurance for a big amount at a low price.Any individual or company can seek insurance from an insurance company, but the decision to provide insurance is at the discretion of the insurance company. The insurance company will evaluate the claim application to make a decision. Generally, insurance companies refuse to provide insurance to high-risk applicants.

WHAT TYPE OF INSURANCE AVAILABLE

Insurance in India can be broadly divided in following ways:

Life insurance

As the name suggests, Life insurance is insurance on your life. You buy life insurance to make sure your dependents are financially secured in the event of your untimely demise. Life insurance is particularly important if you are the sole breadwinner for your family or if your family is heavily reliant on your income. Under life insurance, the policyholder’s family is financially compensated in case the policyholder expires during the term of the policy.

 

Health insurance

Health insurance is bought to cover medical costs for expensive treatments. Different types of health insurance policies cover an array of diseases and ailments. You can buy a generic health insurance policy as well as policies for specific diseases. The premium paid towards a health insurance policy usually covers treatment, hospitalization and medication costs.

 

Car insurance

In today’s world, a car insurance is an important policy for every car owner. This insurance protects you against any untoward incident like accidents. Some policies also compensate for damages to your car during natural calamities like floods or earthquakes. It also covers third-party liability where you have to pay damages to other vehicle owners.

 

Education Insurance

The child education insurance is akin to a life insurance policy which has been specially designed as a saving tool. An education insurance can be a great way to provide a lump sum amount of money when your child reaches the age for higher education and gains entry into college (18 years and above). This fund can then be used to pay for your child’s higher education expenses. Under this insurance, the child is the life assured or the recipient of the funds, while the parent/legal guardian is the owner of the policy.

You can estimate the amount of money that will go into funding your children’s higher education using Education Planning Calculator.

 

Home insurance

We all dreaming of owning our own homes. Home insurance can help with covering loss or damage caused to your home due to accidents like fire and other natural calamities or perils. Home insurance covers other instances like lightning, earthquakes etc.

ADVANTAGE OF INSURANCE

The following are some of the advantages of taking an insurance policy.

Perfect cover for your family after you are gone: As it is impossible to predict the future, no one knows what happens next. Protecting your family from an unforeseen potential peril could be your top priority. An insurance policy can render a helping hand when you are unable to support your family or after your death.

Benefit of compensation: The financial loss caused by the peril is compensated by an insurance. If the untoward incident happens before completion of the tenure, you can claim the financial loss covered under the insurance without much hassle. It reduces lot of your mental stress and agony caused by the peril. In case of life insurance, your family gets a financial cover after your death.

Tax Benefits: irrespective of the insurance plan you buy, you can claim tax benefits up to 1.5 lakhs under section 80C as per Income Tax Act 1961.

Financial support post retirement: There are special insurance plans that are tailor-made to support after your retirement. It makes you financially healthy after when you would not be able to earn money at old age. Moreover, buying an insurance at a young age becomes cheaper in the long run.

For specific purposes: An insurance is earmarked for specific goals unlike other financial instruments. This helps you utilize the funds for the purpose you had initially opted.

For smooth business operation: Even when you meet with unexpected loss in the business, an insurance can help you manage the loss. An insurance policy taken for your employee becomes a motivating factor at the workplace and helps in smooth business operation.

 TAX BENEFITS ON INSURANCE

Apart from the safety and security benefits of buying insurance, there are also the income tax benefits that you can avail.

  • Life insurance premium of up to ₹1.5 lakh can be claimed as a tax-saving deduction under section 80C.
  • Medical insurance premium of up to ₹25,000 for yourself and your family and ₹25,000 for your parents can be claimed as a tax-saving deduction section 80D.

These claims have to be made at the time of e-filling income text return.

 

BASIC STEP TO APPLY FOR INSURANCE POLICIES

  • Decide amount that you want to spend for insurance policies.
  • Explore list of insurance facility providing company.

  • Compare plans, offers along with extra benefits.

  • Select best insurance plan providing company.
  • Calculate tax benefits from that policy.
  • Check policy tenure as per your need.
  • Validate information about insurance providing company to avoid any financial trap.
  • Read online feedback of customers regarding respective policy.
  • Check important formalities.
  • Fill application with important details including your personal information.
  • Choose your nominee as per your personal preference.

 USES OF INSURANCE

Insurance benefits individuals, organizations and society in more ways than the average person realizes.  Some of the benefits of insurance are obvious while others are not.

  1. The obvious and most important benefit of insurance is the payment of losses.
  2. The second benefit of insurance is managing cash flow uncertainty.
  3. A third and uncommon benefit of insurance is complying with legal requirements.
  4. Another very important benefit of insurance is promoting risk control activity.
  5. The fifth benefit of insurance is the efficient use of an insured’s resources.  Insurance makes it unnecessary to set aside a large amount of money to pay for the financial consequences of the risk exposures that can be insured.  `
  6. Another uncommon, important benefit of insurance is support for the insured’s credit.
  7. The seventh benefit of insurance is it provides a source of investment funds.
  8. The last benefit of insurance is reducing social burden.  Insurance helps reduce the burden of uncompensated accident victims and the uncertainty of society.