An insurance or insurance policy is a mutual agreement between the individual purchaser of the policy and the insurance company, wherein the former pays regular premiums against the promise by the latter that if any untoward incidence takes place where the protected asset/life/health etc faces damage/death, then the insurance company will cover for resulting expense. In some cases, such as life insurance, you will get returns on the premiums paid when the policy matures, despite being alive. In case of death, the nominee shall receive the decided sum assured with bonus and earned interest on the amount.

Apart from individuals, private and public sector companies can also purchase insurance to protect machinery, assets, employees etc. Insurance policies are thus a way to manage risk so that the insured object, person, etc gets protection against possible eventualities such as sickness, death, damage, loss, etc. Thus by opting for insurance, you are able to reduce financial worries.

Types of Insurance in India

Below mentioned are different types of insurances available in India.

  1. Health Insurance: A health insurance provides protection against medical costs arising from hospitalization or accident, surgeries, illness, nursing care, diagnostic tests, hospital accommodation, ambulance service, medical bills, consultation etc. You can purchase a health insurance policy by paying a specific amount of premium, periodically, to the health insurance provider.
  2. Life Insurance: A life insurance policy is a shared bond between the insurance organization and the insured individual, wherein the latter pays a specific amount of money as premium to the former. The insurance company protects you/asset against future eventualities such as damage, loss, death in case of individuals/family members/employees etc. There are different insurance policies for life meted by insurance companies in India. Life insurance policies do not offer risk coverage and you can borrow money against certain such polices as well.
  3. Travel Insurance: You do not have to explore your wanderlust spirit in fear anymore because your travel can be insured, and any expenses because of loss of baggage, delay in flight, trip cancellation, can be covered, if you protect the trip with a travel insurance. Travel insurances help to breeze through any unexpected costs or nags faced during travel trips.
  4. Home Insurance: A home insurance policy is not only protection to your home, but also a protection to the property, which is an asset in itself. The insurance policy protects the home against liabilities arising from loss or damage caused to your house or/and its contents.
  5. Vehicle Insurance: There are two types of popular vehicle insurance, car insurance and two-wheeler insurance. Some insurance for vehicles even cover other heavy-duty vehicles. These policies cover expenses caused by damage, accident, loss, theft etc of the vehicle in question. Like any other insurance, you need to pay regular premiums, and the insurance company will then provide a cover for the expenses, which are listed in the insurance policy paper.

Why to Take Out Insurance?

You must be thinking, why you need insurance. Trust us; the reasons for it are plenty. Life is full of uncertainties and it is vital that you buy insurance as early as possible in order to protect yourself and your family against all odds. An insurance plans gives you protection and particularly helpful for senior citizens, as at an elder age when income decreases and finances are not enough to cover for health expenses or other urgent incidences, such as breakdown of car, repair or damage of house etc.  Many insurance policies offer loan against them, which is another advantage you can vouch on.

There are certain insurances, which do not cover the costs until the eventuality arises. Thus, you may feel you are paying for something that may really never occur, however, taking out insurances for vehicles and home will help to hedge the financial pressure in case the same were to get affected by damages, losses, etc. Some of the insurance policies also fulfil your goal to investment and tax-savings. More importantly, insurances are not just about you, but your loved ones and assets. Thus, investing in insurance is a win-win situation.