Insurance: Meaning, types, and benefits
Insurance is a vital financial product that offers security against risks and uncertainties. Insurance policies provide several benefits that are crucial during emergencies, and there are several types of policies available to cater to diverse needs and situations.
What is insurance?
An insurance policy is a contract between the insurer and the insured, in which the insured pays a premium in exchange for coverage and benefits. Insurance helps you and your family manage risks. It lets you protect your savings during emergencies. Insurance policies provide coverage against unexpected financial losses.
Why is insurance important?
Insurance is an essential aspect of modern life, providing financial protection against unforeseen risks and events. Whether it is for individuals or businesses, insurance can help mitigate the impact of financial loss brought about by accidents, illness, theft, or natural calamities. By providing stability and security, insurance plays a crucial role in financial future planning.
Types of insurance policies
Below are different types of insurance policies that you can avail of as per your requirement.
- Life insurance
- Health insurance
- Home insurance
- Motor insurance
- Travel insurance
These insurance policies are further categorised in different types, such as:
- Comprehensive insurance
- Third-party insurance (applicable in car insurance and bike insurance)
- Top-up insurance policies
- Add-on covers/rider plans
Reasons to buy an insurance policy
Here’s why having an insurance policy is important.
Financial security: Insurance policies keep you financially equipped for any emergencies. These policies act as a financial backup for you and your loved ones in times of crisis. It can help mitigate the impact of accidents, illnesses, or other unexpected events that can cause financial strain.
Peace of mind: Knowing that you have a good financial backup for any uncertainties will help you stay worry-free.
Long-term wealth creation: Purchasing insurance can be a wise financial decision, as it allows you to leverage the power of compounding and deferred payments to create long-term wealth.
Things to consider when buying insurance online
Here are the factors that you must consider when buying insurance online.
Evaluate your needs: First and foremost, make a checklist. Understand what kind of policy that you require. For example, if you need a health insurance, then evaluate whether you need it for self or family. If you are considering buying a health insurance for senior citizens, you may want to look for specific policies designed for the age group.
Compare premiums and coverages online: Secondly, go on different insurance providers websites to check for the policies they offer. You can also visit websites like Bajaj Finance Insurance Mall, where you get all the plans at one platform. This makes it easier to compare and research on different policies, their coverage, and premium. It also helps you get the best deal and coverage. Choose the one that suits your requirement and budget.
Understand policy terms and conditions: While you are researching on different policies, ensure to read the policy terms and conditions. It will give you a better view on the coverages offered, exclusions, waiting period (if applicable), claim process, and more. It is vital to read and understand the policy terms and conditions.
Frequently asked questions
An insurance policy gives you financial security during emergencies. It helps you get best-in-class facilities and coverage without worrying about the funds. Additionally, insurance policies ensure you maintain your health and life. For example, health insurance policies give you the benefit of free health check-ups that help you track your health record. Many life insurance policies allow you to save and invest, benefiting you in the long run. These plans help you earn monthly incomes and secure your and your family's future.
You can buy insurance policies after carefully considering and comparing plans offered by various insurers. After deciding which policy to buy, you can purchase the policy online or offline through registered insurance agents. Bajaj Finance Insurance Mall lets you compare and buy insurance plans of your choice online in just a few clicks.
These are the two categories of insurance policies available in India:
Under general insurance, there are several types of insurance coverage:
1. Health Insurance
2. Motor Insurance
3. Home Insurance
4. Travel Insurance
Under life insurance, some of the insurance plans available are:
1. Term Life Insurance
2. Whole Life Insurance
3. Endowment Plans
4. Unit-Linked Insurance Plans
5. Child Plans
6. Pension Plans
Bajaj Finance Limited partners with leading insurers in India to offer a range of insurance policies. You can buy from a selection of health insurance, motor insurance, life insurance, savings and investment plans. You can also buy travel insurance, pocket insurance, and pocket subscription plans. To know more about the various plans and their premiums/membership fees click here.
An insurance policy gives you financial security. You can avail of the best-in-class facilities during emergency without worrying about the funds. An insurance policy gives you financial security to avail of the best-in-class facilities in time of emergency without worrying about the funds. Not only that, it ensures you maintain your health and life. For example, health insurance policies give you a benefit of free health check-ups that help you track your health record. Many life insurance policies allow you to save and invest, benefiting you in the long run. These plans help you earn monthly incomes and secure your and your family's future.
In cashless claims, you do not have to pay the bills in cash. The insurer takes care of the bills directly with their network service provider. You only have to visit any of the network hospitals or garages to avail of the cashless claim facility. For example, if you opt for a cashless claim facility in health insurance, your insurer will directly settle the bills with the network hospital. Similarly, in motor insurance, repair your vehicle at any of the insurer’s network garages and get cashless services. The insurer settles the bills upon verifying the claim details.
An insurance claim is a formal process wherein a policyholder raises a request with the insurance company for coverage or compensation. There are two types of insurance claims: cashless and reimbursement. The insurer directly settles the amount with the network partner in case of a cashless claim. For reimbursement claims, the policyholder must raise a request separately. Share the relevant documents with the insurer to get reimbursed for the expenses.
Non-life insurance are is general insurance that includes health insurance, motor insurance, travel insurance, and home insurance. These policies give your coverage against medical-related expenses and damages or losses caused to your asset or property.
Insurance policies can offer significant tax benefits in the form of deductions and exemptions on the premiums paid. This can help reduce the policyholder's overall tax burden, making insurance an attractive option for those looking to save on taxes while protecting their financial health.
Click here to know the tax benefits on health insurance.
Bajaj Finance offers 200+ Pocket Insurance plans at premiums starting from Rs. 19. These small-ticket plans offer coverage against health, travel, accident, cyber protection, and gadgets like mobile phones and laptops.
Bajaj Finance Limited has partnered with leading insurance companies in India. Our health insurance partners include Aditya Birla Health Insurance, Bajaj Allianz General Insurance, ManipalCigna Health Insurance, Care Health Insurance, and Niva Bupa Health Insurance. We also have various motor insurance partners, such as ACKO General Insurance, SBI General Insurance, HDFC ERGO, ICICI Lombard, and Bajaj Allianz Genera Insurance. For life insurance, we have partnered with HDFC Life Insurance and Bajaj Allianz Life Insurance. Our partners for assistance service providers are CPP Group India, DocOnline Health and Bajaj Finserv Health.
Bajaj Finance provides 300+ insurance policies in different categories like health, life, motor, travel, pocket insurance and subscriptions.
Insurance is a contract between an individual or business and an insurance provider, covering you against financial loss in exchange for a premium payment. There are various types of insurance policies like life, health, motor, property, and others to provide financial stability in case of any unforeseen events.
An insurance premium is the money/cost you pay for an insurance policy.
Claim settlement is a process in which the insurer pays the policyholder as compensation.
Certificate of insurance (COI)
This is a document issued by an insurance company that mentions the policyholder's name, effective date, coverage type, and policy limits.
Policy period is the duration between the inception and the expiry date or the cancellation date of the insurance policy.