Unforeseen emergencies or accidents can put an immense financial burden on your shoulders. Emergencies, such as unfortunate death, medical emergencies, damage to your vehicle or property may force you to exhaust your savings or dip into your family’s hard-earned money. The right insurance policy can provide proper financial coverage and support, keeping you prepared in advance to tackle such emergencies.
An insurance policy is a contract between the insured and the insurer to reimburse the amount of incurred loss. In exchange, the insured has to pay a nominal premium amount. Discussed below are the types, benefits, and factors to look out for while an insurance policy in India.
Types of insurance policies in India
Different types of insurance policies provide coverage against different kinds of risks. As a buyer, you should be aware of the factors to consider while buying an insurance policy.
Discussed below are the different types of insurance policies and their categorisations.
General insurance plans protect you from any financial loss caused to your assets due to fire, burglary, theft, or accidental damage. These plans give coverage for your home, car, property, and others. It also provides personal insurance coverage against health and travel emergencies. General Insurance is further divided into four categories:
1. Health insurance:
Health insurance helps you take care of your and your family’s health care expenses without any financial distress. A policyholder can claim the cost of their medical care in time of need. The insurance plan comes at a nominal premium every year. Choose from a wide range of health, critical illness, and accident insurance policies available in the market. One can claim for tax rebate against the premium paid for these insurance policies.
2. Travel insurance:
Emergencies during travel can be a big hassle. Having a travel insurance policy can protect you from bearing any extra expenses that may occur due to injuries, baggage loss, or other accidents. The policy covers unforeseen expenses arising due to loss of baggage or passport, or trip cancellations. Also, covers medical emergencies, accidents, and more.
3. Motor insurance:
Motor insurance policies offer a cost-effective plan for all motor cars, including commercial ones. These plans offer optimum coverage against theft, accidental damage, and more. One can insure car or two-wheeler with a third-party liability policy or a comprehensive motor insurance policy. Similarly, one can insure a commercial vehicle.
4. Home insurance:
Home insurance secures you against financial losses caused due to damages to the house. This plan covers damages caused due to natural calamities, fire breakouts, accidental damage, and burglary. There are different types of home insurance policies. Some provide coverage for the home structure as well as the valuables inside it. Both tenants, as well as homeowners, can buy a home insurance policy.
Apart from general insurance, there are different types of Life Insurance policies. Here’s some information about these plans.
Life insurance policy and its types
A life insurance policy provides financial protection to the insured’s family in case of his/her demise. The policy offers a lump sum amount that enables the family to meet future expenses, in the absence of the policyholder. Learn more about the different types of life insurance policies below:
1. Term insurance:
A term insurance policy offers benefits to the family of the policyholder if he/she dies during the specified term period. If the insured is living until the policy ceases, then there is no payout of any claim. Certain term insurance policies offer multiple flexible payout options.
2. Whole life insurance:
It covers the entire living period of the policyholder. It includes a cash value component that increases exponentially over a period. Whole life insurance holders can either withdraw their accumulated cash value or take loans against the policy. The insured can get coverage against death for the entire living period, unlike term insurance.
3. Child Insurance 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.
4. Retirement/Pension policy
Retirement policy ensures the policyholder a regular income even after retirement. With this plan, you can secure yourself financially in old age. The retirement policy covers your financial needs post your retirement until the age of 100 years.
5. Endowment Policy
Endowment policy pays an amount either to the policyholder or their beneficiaries as per the maturity date. This policy serves both, the purpose of insurance and savings. It also provides a terminal bonus and reversionary bonus to the policyholder.
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. You get your policy document emailed 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 health, vehicle, or valuables.
● Online reviews: Before you purchase a policy, you can read reviews about the 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 when buying an insurance policy
There are certain things one must consider while buying an insurance policy. Given below are a few important factors to look out for:
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 your coverage amount
There is no certainty as to which category one falls into. However, it is wise to consider various factors like lifestyle choices, hereditary illness, city of residence, etc. to estimate the coverage amount.
Compare your out-of-pocket costs
Insurance companies do not cover you for the entire amount of loss. The policyholder also pays a certain percentage of the claim amount. You can always cross-check different plans and pick the one that offers you maximum coverage at a reasonable cost.
Benefits offered by every plan are different. You are likely to narrow down your options once you come across this point. While comparing policies, many people simply go by the lowest premium amount when they should look for the benefits that each policy offers.
Do not choose a policy purely based on its premium. You must carefully analyse the benefits that a policy offers against the premium paid. The cost of insurance must be reasonable enough.
In case you are looking for budget-friendly insurance plans, you can check out the various Pocket Insurance plans offered through Bajaj Finance. The plans start at just Rs. 19.
Why should you buy an insurance policy early in your life?
An insurance policy secures you financially against loss or damage caused to your assets or valuables. Delaying the purchase of an insurance policy exposes you to multiple risks and hazards. Most insurance companies define 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 from a young age, you can also enjoy the advantage of lifetime renewability. Some insurance policies also offer you tax benefits.
If you are looking for an option to buy insurance policies online, you can opt for the Bajaj Finance Insurance Mall. Here you can purchase insurance policies conveniently in just a few clicks. You can check the coverage and benefits for each and accordingly choose from over 200+ plans available.