image

Different Types Of Insurance Policies In India

Insurance Policies in India

While you cannot ensure a completely risk-free life, you can always choose insurance as a way to deal with unforeseen incidents that you may come across. A right insurance policy will not only protect you against any financial setback but also offer the much-needed help in times of need.

No one can be fully prepared for the unplanned emergencies of life, as sudden and stressful as they get! However, you can make it financially easier with the right cover for yourself and your family.

When it comes to insurance, we have you covered! We realise that everyone has different needs, which is why we have diversified our insurance services, so you can get the coverage that’s best for you.

Stay Protected, Stay Secure with Insurance.

The insurance industry in India has significantly evolved in the recent years. Insurance providers are now focusing on offering customised products that cater to the specific needs of customers. There are a variety of products in the market covering different aspects of an individual’s life. Similarly, there are commercial insurance products that help businesses mitigate various kinds of risks.

In India, insurance policies can be broadly classified into General Insurance and Life Insurance. Other than these two categories, there is another category called pocket insurance which is slowly gaining popularity in India. Let’s review each of these policies in brief, along with the features and benefits they offer.

General Insurance

In India, insurance policies can be broadly classified into General Insurance and Life Insurance. Other than these two categories, there is another category called pocket insurance which is slowly gaining popularity in India. Let’s review each of these policies in brief, along with the features and benefits they offer.

General insurance protects an individual from financial losses due to injury/loss/damage to self or their insured assets. These insurance policies cover damages/losses that may occur to assets like home, vehicle, property, and others due to fire, burglary, theft, or accidental damage. It also includes personal insurance cover against health and travel emergencies.

General Insurance can be further divided into the following categories:
  • Health
  • Travel
  • Motor
  • Home
Health Insurance: A health insurance policy helps you take care of your family’s health without any financial distress. A policyholder can claim the cost of their medical care until the maturity period of policy by paying a nominal premium every year. You can choose from a wide range of health, critical illness, and accident insurance policies available in the market. A tax rebate can also be claimed against the premium paid for such policies.

Travel Insurance: If you have wanderlust, a good travel insurance policy is a must. The policy covers unforeseen expenses arising due to loss of baggage or passport, medical emergencies, trip cancelation, accidents, and more.

Motor Insurance: Motor insurance offers a cost-effective protection for all motor vehicles, including commercial vehicles with optimum coverage against theft, accidental damage, and more. You can insure your car or two-wheeler with a third-party liability motor insurance policy or a comprehensive motor insurance policy.

Home Insurance: Home insurance policy safeguards you against financial losses resulting from damage caused to your house due to natural calamities, fire breakout, accidental damage, and burglary. There are different types of home insurance policies, some of which not only provide coverage for the structure of the home but also the valuables inside it. Both tenants, as well as home owners, can buy a home insurance policy.

Life Insurance

A life insurance policy provides financial protection to the family of the insured in case of the policyholder’s demise. It offers a decent lumpsum amount that can be used to meet future expenses, in the absence of the policyholder.

There are different types of life insurance policies; depending upon the type of coverage offered:
  • Term Insurance
  • Whole Life Insurance
  • Child Plan
  • Retirement/ Pension Plan
  • Endowment Policy

Term Life Insurance: A term insurance policy offers benefits to the family of the policyholder only if he/she dies in the specified term period as per the policy. If the insured remains to be living until the policy ceases, then there is no pay-out of any claim.
Benefits:
• Life coverage and financial security at an affordable rate of premium.
• Certain term insurance policies offer multiple flexible pay-out options.

Whole life insurance: Whole life insurance policy covers the entire living period of the policyholder. It includes a cash value component that increases exponentially over a period of time.
Benefits:
• Whole life insurance holders can either withdraw their cash or take loan against it.
• The insured can get coverage against death for the entire living period, unlike the term insurance.

Child Plans: A Child Insurance Policy helps you start saving and investing your money to secure your child’s future financial needs. You can withdraw the accumulated sum when your child reaches adulthood.
Benefits:
• Child insurance policy secures the future of a child even in the absence of parents.
• A secured loan can be taken against the policy in the intermediate period.

Retirement/Pension policy: Retirement policy ensures the policyholder a regular income even after retirement. With this plan, you can secure yourself financially in the old age.
Benefits:
• The retirement policy covers your financial needs post your retirement until the age of 100 years.
• The policy also offers a premium rebate.

Endowment Policy: Endowment policy ensures an amount to be paid either to the policyholder or their beneficiaries as per the maturity date. This policy serves both the purpose of insurance and savings.
Benefits:
• A policyholder can benefit from long term savings.
• Endowment insurance also provides terminal bonus and reversionary bonus to the policyholder.

Pocket Insurance

Also referred to as micro insurance or small insurance, Pocket Insurance is essential to safeguard yourself, your family, and your personal belongings from a variety of risks and uncertainties. It covers you in incidents such as wallet theft, road trip cancellation, electronic gadget breakdown, gym injuries, lost keys, damage to mobile screen, and more. Offered by Bajaj Finserv, Pocket insurance covers a host of products at an affordable price.

Pocket insurance policies can be categorized under the following segments.

Assistance: The products under Assistance category are designed to aid you with challenges in your everyday life. You can choose from a wide range of products such as Wallet Protect, Key Replacement Insurance, Purchase Protection Cover, ATM Assault & Robbery Cover, Designer Clothes Insurance, and more.

Lifestyle: The Lifestyle category under Pocket Insurance includes products such as Watch Insurance, Morning Walk Accident Insurance, Daily Commute Insurance, and more. Products under the Lifestyle category help you cover minor risks at very low premiums.

Travel: Pocket Insurance products under Travel category cover you against the vulnerabilities and risks during your journeys and trips. You can seek coverage for your road trips, treks, pilgrimage, and even your baggage. The duration of the policy ranges from 10 days to 365 days.

Health: Under the health category, you can avail a range of health insurance policies including Child PA Cover, Pregnancy Complications Cover, Hospital Cash Cover, Dengue Cover, Infection Cover, amongst others.


Why Should You Buy An Insurance Policy Early In Your Life?
Most financial planners suggest purchasing an insurance policy even before one starts to save. An Insurance policy safeguards you against financial risks due to loss or damage to your assets or valuables. Delaying the purchase of an insurance policy exposes you to multiple risks and hazards. Most insurance companies come with an upper age limit for entry, so you may not be eligible to apply for health insurance after you cross a certain age. If you have had insurance since a young age, you can have a lifetime renewability. Some insurance policies also offer you tax benefits.

What Are The Benefits Of Buying An Insurance Policy Online?
You can buy an insurance policy offline through an insurance broker or you can buy the same online. Purchasing insurance online is more convenient as the whole process hardly takes a few minutes and you get your policy document emailed to you almost immediately.

Here are some of the benefits of purchasing an insurance policy online.

  • Convenience: You can easily purchase an insurance policy online from the comfort of your home. With just a few clicks on the screen, you can secure your valuables.
  • Online reviews:Before you buy a policy online, you can read reviews about a policy online. This will help you make an informed decision.
  • Easy comparison:You can compare multiple insurance policies online and choose the one that best fits your requirements.

  • Factors To Consider Before Choosing An Insurance Plan:

    Select the indemnity cover that suits you: Insurance plans are tailored as per different segments like an individual health plan or a child plan. You can analyse all the existing plans and choose a plan that meets your specific requirements.

    Estimate the coverage required: There is no certainty as to which category one falls into. However, it is wise to take into account various factors like lifestyle choices, hereditary illness, city of residence, etc. to estimate the coverage required.

    Compare deductibles: Insurance companies do not cover you for the entire amount of loss. There is a certain percentage of the claim amount that has to be borne by the policyholder. This amount is often referred to as deductible. You can always cross-check different plans and pick the one that offers you maximum coverage at a reasonable cost.

    Scope of Coverage: Benefits offered by every plan is different. You are likely to narrow down your options once you come across this point. While comparing policies, a lot of people simply go by the lowest premium amount when they should actually look for the benefits that each policy offers.

    Budget: A policy should not be chosen purely based on its premium. You must carefully analyse the benefits that a policy offers as against the premium paid. If price is a major concern, you should check out the Pocket Insurance policies offered by Bajaj Finserv. These policies offer you adequate coverage at premiums starting from just Rs. 79.

Frequently Asked Questions

What is an Insurance policy?

An insurance policy is a contract between the insured and the insurer to reimburse the amount of incurred loss in exchange for a nominal premium amount.

What are the types of Insurance policies in India?

Insurance policies are generally divided into two main categories
a) General insurance, and
b) Life insurance
Further, these policies are subdivided into multiple categories targeting different individuals and different assets. Pocket insurance too is gaining popularity, covering a host of products for individuals who are looking to buy affordable insurance policies.

Which insurance policy is the best to buy in India?

Insurance policy is designed for a specific purpose covering certain risks for an individual. This is highly subjective and differs from person to person.

Which life insurance policy is the best?

Life insurance policy is further divided into different categories like term insurance, whole life insurance, endowment policy, and more. You can analyse the available options and choose the one that caters to you in the best possible way.

When should one buy a life insurance policy?

Life insurance gives financial security to your near and dear ones. You must not risk your family’s future if you are the only bread earner of the house. Delaying the purchase of a life insurance policy can be risky. Instead, be an early bird and buy it right away to avail its benefits.

Subscribe to our Newsletter

All you need to know about personal loan from Bajaj Finserv