Insurance policies are broadly classified into Life and General insurance products. Life insurance policies provide financial protection against loss of life. General insurance products provide financial protection against non-life events such as medical exigencies, accidents, for homes, travel, automobiles, etc.
The value of the insurance cover that you opt for should depend on your need for protection. If you are applying for asset insurance, the value should ideally cover the cost of replacing your asset. Similarly, the final payout of a term plan should compensate your family for the financial loss that they will face in case of your demise. Unit Linked Insurance Plans (ULIP), endowment or whole life policies should fall in line with your overall financial plan and enable you to receive funds when you expect to use them.
Insurance aims to provide financial protection to an individual, one’s family and assets from unfortunate eventualities such as death, accident, illness, etc. or loss of assets. A classic insurance policy, i.e. a term plan, provides financial assistance to your family in the unfortunate event of your death. In addition to that, modern day insurance policies have evolved to help you to build your corpus of wealth, plan for retirement, protect your house and personal belongings, reimburse medical expenses, hospitals bills, etc.
Life insurance is a concept that aims to provide financial protection to the family members of the insured individual in case of an unfortunate eventuality such as the demise of the insured individual.
