BASICS OF INSURANCE

Now I am going to discuss few basics things about insurance.

What is Insurance?

Insurance can be shortly defined as “Sharing of Risks”.

Types of Insurance:

· Life insurance.

· General insurance.

General insurance is made for assets and personal belongings like motor insurance, land insurance and so on.

Life insurance is for human life and can be split into variety of categories.

· Health Insurance

· Accidental death benefit.

· Critical Illness.

· Pension policies and so on.

In the above mentioned policies there are 3 types of products available

· Term Products.

· Ulip products and

· Conventional Products.

Term Products are purely risk based products. The Money or benefit can be claimed only by the death of an individual who is insured. The Premium paid cannot be claimed.

Ulip Products are the products that are invested in the Share Market. After the maturity period of the insurance policy depending upon the Market level an individual can claim more or less profit.

Conventional products are purely risk free products and are not invested in the Share Market. The insurer can claim a particular benefit after the maturity of the insurance policy.

At present there are around 32 insurance companies in India. Some of them are as follows:

· Tata AIG Life Insurance [TALIC]

· Bajaj Allianz life Insurance [TLC]

· ICICI Prudential life Insurance.

· Kotak Mahindra life insurnace.

· Reliance life insurance.

· Life Insurance Corporation of India [LIC].

· Birla Sun life Insurance and so on.

Among the above mentioned companies LIC is the one that exists in India for more than 50 years.

Need for Insurance?

Money plays a vital role in our life. In case of any emergencies like operation, surgery there is a definite requirement of money. This is an unknown scenario and requires lot of money is short duration.

To overcome this if the patient is insured for his health previously then no need of worrying. He can claim the amount from the particular insurance company.

Not only for illness but also for children’s future purpose. A child or baby if insured it helps their parents when the child becomes an adult ie.. the amount can be used for education or marriage.

Therefore Insurance plays a vital role and is important to have an insurance policy for every individual.