TYPES OF INSURANCE POLICIES INDIA: MEANING, FEATURES, COMPANIES

There are many types of insurance policies in India. Before getting into the insurance types, let us understand the meaning, need, and importance of insurance.

One of OutKast’s famous songs said, “You can plan a pretty picnic, but you cannot accurately predict the weather.”

Rightly so, life is an unpredictable journey with multiple bends and turns. You may plan as much as possible, yet a few surprises spring up now and then. While emotional baggage is unavoidable, financial strain only adds to the problems.

Since the world goes around with money primarily, any hardships can strike you harder if huge finances are involved. Insurance policies provide this very cushion and prevent sudden financial burden, stress. 

In other words, any loss of the insured party that is covered in the contract will be paid for by the insurance company.

The insured individual pays a certain sum of money known as a premium in return to insurance company for covering risks. Premiums can either be paid regularly or in a lump sum at once. 

WHY TAKE AN INSURANCE POLICY?

Insurance policies cover several unforeseen circumstances like death, accidents, illnesses, losses in businesses, etc.

When you purchase an insurance plan from a company, you transfer your future losses to that particular insurance company.

This lets you off the burden of having to think over and stress about its occurrence constantly.

The insurance company agrees to pay you for the money assured in the contract in the event of those losses. In return for this promise, you are liable to pay a smaller amount called Premium to keep your insurance policy running and alive.

To put it in a nutshell, different types of insurance policies can solve the following problems for you.

COVER YOU FOR ANY LOSSES IN THE FUTURE:

Insurance company will pay you money in case of any sudden illness or worst-case scenario of death.

Your family or nominee will get a certain sum you pick for after you pass away.

Insurance policies also covers your vehicles, should they ever be damaged in an accident.

For businesses, theft or fire insurance policies prevent any stock and capital losses by paying for the amount drained in the mishap. 

PREVENTS SUDDEN MONEY CRISIS:

As the insurance company agrees to pay for your losses, sudden financial problems do not bother you as they otherwise would.

In case of health problems, you can focus on getting well rather than worrying about your exorbitant hospital bills. 

Suppose your business goes down in flames because of a short circuit. In that case, you have to only worry about the reconstruction and repurchase of goods and not about financing the same. 

This way, Insurance policies can ease your worries at such difficult times in life. 

ENSURES FINANCIAL STABILITY AND SAVINGS:

There are two aspects to this reason.

Firstly, any sudden contingency could pressure you on the cash front. Due to this reason, you may end up spending all your savings or even end up borrowing to meet the sudden requirement. Insurance policies give you the comfort of not being thrown off track. 

Second, particular types of life insurance policies pay you back all the money accumulated, along with interest, should nothing happen to you during the policy’s life. This feature would guarantee a cash inflow even if you were to outlive your insurance policy period, thereby securing your retirement fund. This money is called maturity benefit. 

  • Provides a Peaceful Mind to Focus on other things
  • Knowing your family’s future or general asset’s risks are secured allows peace of mind to function every day. We know life is unpredictable, but you will not have to bear the brunt of financial problems in case of an unfortunate event. 

TYPES OF INSURANCE POLICIES IN INDIA

Insurance in India dates back to the nineteenth century, with the Oriental Life Insurance Company created in 1818.

The industry has evolved ever since in India, with over 57 insurance companies offering several types of Insurance policies. 

There are mainly two types of insurance in India: a) Life Insurance; and b) General or Non- Life Insurance. 

LIFE INSURANCE POLICY & TYPES OF LIFE INSURANCE:

Life is unpredictable. Unarguably, the most unpredictable and hard to accept is the uncertainty of death.

We all are aware of the fact that death is inevitable, and it will come someday.

However, premature deaths are a shock to the deceased’s family members. The death causes emotional distress, but financial stress is also an added baggage if it is an earning member. 

While none can compensate for emotional trauma and loss, life insurance policies make up for the financial burden a death brings along.

It is safe to say that life insurance policies protect you, your loved ones from the risk of early death. 

There are several types of life insurance available today to suit various customer needs and preferences.

Let us look at the most commonly offered types of life insurance policies in India.

TERM LIFE INSURANCE POLICIES:

As the word suggests, this type of insurance is for a specific ‘term’ or time duration. These types of plans are the most affordable and most straightforward of all types of insurance available.

The basic feature of a term insurance plan is to provide the insurance money (death benefit) only if the insured individual dies within the period specified in the contract—for instance, 50 years from the policy purchase date.

Therefore, it is a time-bound protection policy that does not help individuals with monetary pay-out if they live longer than the duration chosen in the contract. 

While it may seem uneasy to anticipate the range of your living years, term plans are an ideal choice due to the reason that Term plans have the lowest premium payments of all insurance policies out there. Why, may you ask? It is because of the structure of their pure-protection policy. 

Since there is no maturity benefit attached to such insurance policies, common advice is to opt for these insurance types only for a short time. Young people could take this plan for their upcoming years if they are looking at affordable premium plans. 

The premiums are usually low in the initial years of a policyholder’s life, but it does not stay the same. Premiums increase with every policy renewal, given the increasing age of the policyholder. However, it is always best to start a policy as soon as possible. 

Insurance companies usually provide added benefits over and above the basic term policy terms. This is called a ‘rider’ and carries an extra charge. Common riders are accidental, disability, and critical illness covers. 

ENDOWMENT INSURANCE POLICIES:

These insurance policies are the most sought after to create savings in the long run along with an insurance cover. In case of an untimely death of the insured, the policy pays out the death sum assured to the family. 

The policy is also beneficial in an alternative situation where the insured person survives until the specified age or duration. In such cases, a maturity sum is paid back to the policyholder along with interest. 

These two features make endowment plans stand out among other types of insurance as a double investment tool – they not only cover you for death, also support you if you outlive the number of years anticipated. 

Bonus is added to the benefit for participating category of policyholders if the insurance company makes a profit in the respective financial year. 

Rider benefit options are available on this policy as well, enhancing the overall insurance package.

WHOLE LIFE INSURANCE POLICIES:

Also termed as permanent life insurance or a fixed insurance policy, whole life plans are often similar to an endowment, but with a few tweaks.

Following are a few basic features of this type of life insurance.

Whole life insurance covers a person for their entire life. This means there is nothing called a specific duration or age where the policy ceases to exist.

The policy usually covers up to 100 years of age. There is always a common condition that the insured pay all premiums on time during the policy period to avail maximum benefits. 

Whole life insurance policies, like endowment schemes, provide a maturity benefit to the ones outliving 100 years. 

This plan’s design is such that insured individuals pay premiums for a limited period and not throughout their lives.

The Premium is only to be paid for the initial 10-15 years of policy purchase, at the company’s discretion. For example, if you took up a Whole life insurance policy at the age of 25, you would stop your premiums at 40 years maximum. But the cover would extend till the time you live, that is up to 100 years age.

As there is a fixed premium payment duration, amounts paid as premiums are higher than term plans for policyholders. 

Another benefit of a term plan is that premiums do not increase with your age. They are fixed until the payment duration of the policy. 

These policies are ideal for those who already created investments for retirement and are looking to create a corpus for their heirs to inherit when they pass away. 

PENSION PLANS:

The name of this type of life insurance suggests it to be about retirement. As prices rise over time, savings and retirement plans get all the more crucial and difficult.

Pension insurance plans offer the dual advantage of both protection and investment in one package. 

Pension plans cover a person’s retirement finances to the extent of the premiums paid. Under this type of insurance, policyholders receive a fixed income every month post their superannuation.

There are many retirement calculators available online to estimate how much funds you may need in the age when you are retired. This policy ensures a steady income flow for financial security in old age.  

The age at which holders of policy plans begin to receive the pension benefit is called the Vesting Age. Ideally, age is fixed at around 50 and goes up to a maximum of 90 years by a few insurance companies.  

The period for which you invest/pay premiums for the pension policy is the accumulation period. It is not to be confused with the Payment period, which means the duration post-retirement in which will receive a pension. 

Although it is highly recommended you do not surrender your policy before the maturity, there might be uncalled financial situations. The surrender value is the amount returned before a policy matures. However, do note it is only applicable after a certain number of premiums have been paid towards the policy. 

Insurance companies also provide death benefits along with pension plans as riders. They usually provide 105% of accumulated premiums paid to the nominee of the policyholder.

MONEY-BACK POLICY:

The money-back policy is often used synonymously with Endowment plans, considering the maturity benefit feature. Both the policies offer a huge lump sum of money if the policyholder survives the policy period or attains a certain age.

However, there is a distinct offer of Money-Back policies – Unlike endowment; these policies do not offer to pay a lump sum amount at the end of the policy period. Instead, there is a provision for payment of a certain fixed percentage of the sum assured. 

The percentage of the sum paid regularly in the form of cashback is called Survival Benefits. These funds are deposited in the policy holder’s account at regular and predefined intervals. 

If a policyholder’s untimely demise, the death benefit is paid equal to the original sum assured. This is done regardless of any previous payments of the survival benefit. 

Money-back plans are also for a comparatively shorter duration of time, ranging between 5 to 25 years.

While other maturity benefit plans come with an additional feature of being used as collateral for loans, money back plans are not eligible for such situations.

This is because a percentage sum of the benefit has already been given to the individual, constantly reducing the benefit amount with time. 

UNIT LINKED INSURANCE PLANS (ULIPs):

Unit Linked Insurance Plans, or simply ULIPs, are a way to both buy an insurance policy for your life and invest in the market at the same time. ULIPs help in long term wealth creation with market returns added on your sum assured. 

These can be customized as per an individual’s risk-taking capacity. Therefore, One can choose highly risky as well as moderate or low-risk options of investments. 

As the premium funds invested market on behalf of policyholders, fund management & other relevant charges are levied by insurance companies over and above the Premium to be paid.

These plans offer a great amount of flexibility concerning market investments and choice of funds. By the process of Switching, you can shift from one fund to another in case you are unhappy with its performance or risk factor. 

COMPANIES OF LIFE INSURANCE POLICY IN INDIA:

There are a total of 24 companies in the business of providing a life insurance policy. All of them offer a variety of policy combinations best suited to customers, requirements, and payment capacity. A few popular companies are listed below. 

LIFE INSURANCE CORPORATION OF INDIA(LIC):

Life Insurance Corporation of India or LIC is a household name for everyone in India. The company is the largest one in its industry, with a bunch of policies on offer.

LIC provides all types of life insurance policies under several names. Since it is a pioneer in the field, it is a market leader in life insurance with more than 65% of the market share—a few popular policy names are mentioned below. 

LIC Jeevan Anand – An endowment plan for the cover of a minimum of Rs 1 Lakh, up to a maximum age of 75 years. 

LIC Jeevan Umang Plan – A whole life policy plan wherein the minimum sum assured has to be Rs 2 Lakh. The maximum maturity age of the plan is 100 years. 

LIC Bima Shree Plan: This is a money-back plan, ideal for high-net-worth individuals. The policy has a minimum sum assured of Rs 10 Lakh, with multiple survival pay-out options. There are other plans like LIC New Money Back Plan 20 and Plan 25 as well. These come with a lower sum assured limit. 

LIC Tech Term: This is a basic term plan cover offered by LIC, with a minimum sum assured of Rs 50 Lakh and a term period up to 40 years. 

LIC Jeevan Shanti Plan: This is a single premium pension plan for long-term retirement planning with a maximum vesting age of 80. 

HDFC LIFE:

Previously called HDFC Standard Life Insurance Company, this is a joint venture between HDFC of India and Standard Life Aberdeen of the UAE. The company has a settlement ratio of over 99%. A few popular plans are mentioned here. 

HDFC Life Click 2 Protect Health Plan  – The term plan offers a minimum sum assaulted of Rs 10 thousand onwards, for a minimum term of 5 years and a maximum term of a person’s whole life (rider benefit)

HDFC Life Sanchay Plus Plan: This traditional endowment plan offers a maturity plus death benefit feature. A minimum premium of Rs 30,000 is to be paid for a maximum maturity age of 80 years. 

HDFC Life Sampoorn Samridhi Plus Plan: This endowment plan offers a maximum of 45 years of plan duration along with a bonus in the benefit assured. 

HDFC Life Classic Assure Plus Plan: The money-back policy provides a life cover with a maximum plan duration of 20 years. A minimum premium of Rs 12,000 is to be paid annually towards the scheme. 

AVIVA LIFE INSURANCE:

Launched by Dabur and Aviva, the U.K. in the form of a partnership in India, this company provides a list of insurance policies for various customer needs. 

Aviva I Life – This is one of the term plans offered by Aviva. This is a plain vanilla term plan with no extra benefits attached. The policyholders are given a death benefit but not a maturity benefit. The minimum sum assured is Rs 25 Lakh with a maximum policy term period of 35 years. 

Aviva Dhan Nirman Plan: One of Aviva’s endowment offerings, this plan offers a traditional savings feature along with an additional bonus. The plan offers both death and maturity benefits with variable payments depending on the policy term. 

Aviva Dhan Samriddhi: A Money-back variant of life insurance, this plan offers regular payments in the form of cashback every five years, along with a maturity benefit attached as well. 

Aviva Next Innings Pension Plan: The plan is ideal for a retirement investment. It provides both a death benefit as well as a maturity payment at the end of the term. This is suitable for those who have reached middle age and are looking to start a retirement fund. The minimum age to buy this plan is 42 years, and the minimum annual premium is fixed at Rs 50,000. 

Aviva Affluence Plan: This is one of the ULIP offerings that benefit long-term wealth creation. There are seven funds customers can choose from as per their risk appetite. The policy also has an in-built accidental death benefit that pays over the sum assured in any demise by accident. 

ADITYA BIRLA SUN LIFE INSURANCE:

The company is a joint venture between Aditya Birla Group and the Sun Life group of Canada. The company offers the following plans, ranging from term to lengthy wealth creation schemes. 

ABSLI Life Shield Plan: The term plan offering covers many features, including an inbuilt critical illness and permanent disability premium waiver. The policy also has a rider of covering the policyholder’s spouse in the same policy plan. The minimum sum assured is Rs 25 Lakh and can take a maximum term plan of 50 years. 

ABSLI Wealth Max Plan: This plan is a single premium unit-linked life insurance variant with a choice of 16 funds to choose from for investment. The policy also provides a top-up facility for whenever customers have additional savings to invest. Premium amount is fixed at a minimum of Rs.100,000 for a policy term of 5 and 10 years, and a minimum of Rs.200,000 for 15 and 20 years. Anyone above the age of 18 is eligible for this plan. 

ABSLI Empower Pension Plans: This Pension Plan allows individuals to get covered in the long term with limited premium payments. There are multiple premium payment options with a minimum of Rs 18,000 when paid annually. There is a range of 5-30 years of accumulation period for the policy. 

 ABSLI Vision Endowment Plan: This classic endowment policy offers a death plus maturity benefit to policyholders. The minimum sum assured and the Premium for this plan are Rs 1 Lakh and Rs 10,000 respectively. 

ABSLI Vision Money-Back Plan: The plan offers regular cashback to policyholders based on their premium and sum assured choices. The minimum sum assured has to be Rs 1 Lakh, with a policy term up to 25 years. 

BAJAJ ALLIANZ LIFE INSURANCE:

The joint venture between Bajaj FinServ and Allianz SE provides a host of life insurance plans available across all age groups and requirements. A few popular plans are listed below.

Bajaj Allianz i-Secure Plan: This term plan offers affordable premiums based on the minimum sum assured to policyholders. The basic term period is for a maximum of 30 years. The minimum age to purchase this policy is 18 years, all the way up to 60 years. 

Bajaj Allianz Life Goals Assure – This ULIP payment comes with loyalty benefits and booster options. The policyholders can choose from four premade investment pathways for market investments. The maximum term period of the policy is up to 20 years with several premium payment frequency options. 

Bajaj Allianz Total Health Secure Goal Plan: This is a hybrid plan that provides both life and health cover to individuals. There are two invariants – Silver and Gold with variable premiums and returns. The maximum term period of the policy is up to 30 years. 

GENERAL INSURANCE POLICIES:

General Insurance covers all risks that are not the threat of death. These primarily are to cover losses incurred on any assets. This policy promises to pay for any financial loss or emergencies that may occur unplanned.

As per IRDAI, permissions, 34 General Insurance companies are operating in India at present. A few procedures require mandatory insurance plans, as well.

For instance, foreign travel mandates health insurance; it is also compulsory for vehicles to be insured. There are several categories of policies available in this type of Insurance, as explained below.  

HEALTH INSURANCE:

Health is the most crucial aspect to fulfill any goal in life. The current lifestyle and stress are causes of sudden medical emergencies, even in the younger age group.

While Life insurance guarantees financial payment in times of death, health plans cover illnesses and hospitalization.

These provide wide access to a number of hospitals and diagnostic centers for policyholders to approach. You need not worry about the extensive bills as the Insurance pays for it. 

Let us explain this another way; health insurance is a contract between the policyholder and the insurance company.

The contract allows the insured to be paid or reimbursed for any expenses on the health care front. There is always a predetermined amount that is the maximum cover.

There are types of insurance policies that cover individuals, families, or groups of people working for an organization. Your health plan premiums vary as per your health condition, any existing illness, and income.

It is advisable to take a health plan for yourself and your aged family as well. It is always good to be safe rather than sorry as a medical crisis could drain your savings in a wink.

Health insurance policies can prove to be a boon as even small procedures today require enormous amounts of money. 

TRAVEL INSURANCE:

With mobility being a key part of all our lives, traveling has become an essential component globally.

The reasons for travel could be many – ranging from leisure vacation, work trip, education, or employment.

There could be several risks while you may be on the move. This types of insurance against mishaps during your journeys. 

The cover is provided for any disability or even death during travel accidents. 

Policies also insure any loss of personal baggage during the transit period, as well as any delay or abrupt cancellations. A few plans are available to reimburse charges on your passport or other relevant important documents’ loss. 

Airlines always provide an option for specific travel and luggage insurance while booking tickets. While travel insurance in India is not very popular, it is usually recommended to be insured. This plan is suitable for frequent travelers. 

MARINE INSURANCE:

This type of policy offers Insurance for all loss and/or damages caused to ships, cargo vessels, hulls, etc. These belong to the sea-route trade process.

It is a daunting task to trade via the waterway as several risks, including natural situations. Cargo insurance is compulsory for transportation and commercial purposes.

Marine Insurance is not for retail clients and is a part of industrial Insurance. Like every other type of insurances, there are a few types of insurance variants available in this too. 

  • Hull Insurance: Hull is the most prime part of a ship. It is the main watertight body of the vessel. Any damage to the hull usually is the cause of heavy expenditure. Hull and machinery Insurance protect owners from damage and loss to the main parts of a ship.
    • Liability Insurance: The ship could be in a crash in transit, a collision, or, very rarely, a pirate attack. In all cases, cargo is exposed to high risk during the voyage. Besides, the life of crew members and those on the ship is also at risk. A carefully chosen liability insurance compensates ship-owners for all such liabilities where losses cannot be in their control. 
    • Freight Insurance: Freight refers to the goods or cargo loaded on ships. The traders have to take cargo insurance when shipping. This is to bear the risk of any loss or damage to the goods. 

MOTOR INSURANCE:

As per the Motor Vehicles Act, buying motor vehicle insurance is mandatory. This policy covers your vehicles from any potential damages like accidents or breakdowns. 

There are usually two types of motor insurance policy – Comprehensive Car insurance and Third-Party Car insurance. 

A comprehensive car policy is taken to cover the vehicle against several risks that may arise out of damage because of an accident or any other risk mentioned in the policy document. 

It also covers the death of both the driver and/or passengers. The plan offers to protect against damages caused by the car to any third party or their property that has suffered. These policies also cover natural calamities like floods, earthquakes by a few companies.  

Third-Party Car insurance protects insurance holders against damage by your vehicle to another vehicle or property by accident. However, any shock or damage to your car is not included in this policy. 

HOME INSURANCE:

Homes are tough to build and take a huge investment for home buyers.

It is essential to secure the premises from any accidental damages.

These are designed to cover several requirements as per the policyholder.

This type of policy also has invariants specific to cover the risk of content damages, structure damage to your property, or even a Tenant’s Insurance. There is also a comprehensive policy that covers both content and structure for overall protection from risks. 

BUSINESS INSURANCE

This is a generic type of Insurance that covers all insurance risks of a business or commercial enterprise. The risks may differ as per the nature of the business.

There are several types of business insurance like,

  • Liability insurance – Include General and Professional Liability insurance. 
  • Employee Insurance Policies
  • Loss of Income Cover
  • Commercial Vehicle Insurance
  • Product Liability Insurance, in the case of manufacturing firms.  

The best way to buy a policy best suited for your business is by assessing your risks at face value. It is always advisable to reach only known and reputed insurance agents for policy purchase. 

COMPANIES FOR GENERAL INSURANCE POLICIES:

NEW INDIA ASSURANCE COMPANY LIMITED:

One of the largest public sector insurance company in the country, New India Assurance, was established way back in 1919.

It was nationalized in 1973 and had since then offered several general insurance policies for various customer segments. Given here are a few of the different policy plans provided by the company.

New India Asha Kiran: 

This health plan is for parents of girl children alone. This family floater covers both spouse and dependent girl children up to 25 years of age (maximum of 2).

The policy carries hospitalization, critical care, and disability benefits to the assured individuals. The list of diseases and conditions covered and not covered must be read and understood carefully before buying this policy.

This does not cover several hospitalization cases of kidney stones, minor cysts, etc. Must submit Pre-assurance tests of medical health. 

New India Overseas Mediclaim (Business and Holiday):

Ideal for frequent travelers, this policy allows for insurance cover up to a maximum of 50,000 USD. However, they will not pay any preexisting medical. The first $100 of every claim is to be borne by the insured alone. 

All individuals up to 70 years of age are eligible for this travel policy. Should take this policy before the person departs from India. Medical reports need to be submitted if the trip is for a duration longer than 60 days.

Marine Insurance Plans:

The company offers several marine insurance plans, including the Charter Liability Insurance covering the risk to the charter of ship cargo. This is primarily because the charters are essential for the protection of the vessel or the vessel. Just one prerequisite laid down here is that a charterer’s liability policy should extend to a ship or vessel under the Hull and Machinery Policy. 

The company also provides duty Insurance. This scheme is provided only on imported products into India. It is generally granted to the party favoring the issue of an import license. Insurance does not cover any increased value of duty until the ship arrives at the port of destination.

There is also a comprehensive specific voyage policy that ends soon after the transit period is complete. 

New India Liability Only Two-Wheeler Insurance Policy:

This policy variant is for the mandate as made in the Motor Vehicle Act 1988 for all two-wheelers. 

This plan usually covers the death, illness, or damage to a third party’s property by the insured vehicle. Shall compensate liability in respect of death or disability and damage to third party property up to Rs.7.5 lakhs up to the vehicle’s life.

New India Liability Only Car Insurance Policy:

This policy is also mandatory as made in the Motor Vehicle Act 1988 for all two-wheelers. This plan usually covers the death, illness, or damage to property of a third party by the insured private car.

Shall compensate liability for death or disability and damage third-party property up to Rs.7.5 lakhs until the vehicle’s life. The policy also covers any external damages like fire, self-explosion, theft, natural calamities, etc.

ADITYA BIRLA GENERAL INSURANCE:

The company is a subsidiary of Aditya Birla capital and offers general insurance policies via several other plans. 

Aditya Birla Active Health Policy:

This policy is a health cover for chronic illness and diabetes treatments for a maximum of 527 days. With policy activation from day one for a few diseases, the policy offers several flexibilities for room selection, hospital networks, and bill payments.

The policy has benefits of unclaimed plans as well, as holders can earn a maximum of 30% of their policy premium back by staying healthy and not redeeming their health policy. 

Aditya Birla provides brokerage consulting for other plans like motor and commercial insurance as well. They help compare and zero in on the policies best suitable for client needs. 

BAJAJ ALLIANZ GENERAL INSURANCE:

Motor Insurance: 

The company provides motor vehicle insurance of three types to all customers with a private vehicle.

The policy offers covers to two, four-wheelers as well as third party insurance facilities. The entire process can be completed and even claimed online, saving the effort to visit any of their offices. 

Health Insurance: 

With a network of over 6500+ hospitals, the company provides an extensive range of health policies to individuals, family floater plans, women-centric illnesses, critical illness insurances, and senior citizen plans. There are both cashless and reimbursement modes of claim settlement available. 

Travel Insurance: 

The company offers several policy plans for travelers ranging from individuals to senior citizens or purposes of a business, leisure, or education.

The policy covers loss of baggage, medical emergencies, etc., for the passengers in transit and on the say in the foreign land. There is also a provision to include air cancellations and rescheduling.

Home Insurance: 

The policy ensures cover in fire accidents, burglary, and theft in houses. There are options for covering only the building premises, the items, and appliances inside homes and the people. There is also a feature to protect family members’ lives in times of related accidents. 

UNITED INDIA INSURANCE COMPANY:

Motor Insurance:

The company offers plans for covering private motor vehicles for their damage or third party insurance. The former covers car or two-wheeler damages due to fire, burglary other external perils. The latter includes third-party damages in case of a collision or accident and self-vehicle driver life cover. 

Health Insurance:

The policy covers hospitalization charges and is inevitably incurred in India to treat illness/disease/injury suffered or incurred by the insured person during the policy term period. The minimum age of independent policy plans is in the range of 18 to 35 years. The sum assured is a minimum of Rs 1 lakh and up to 10 Lakh, always in the multiples of Rs 50,000. 

Householder Insurance:

Insurance offers a maximum of four risks: burglary, theft, fire, personal accidental death, appliances loss, and other household risks. 

SBI GENERAL INSURANCE:

Arogya Sanjivani Policy: 

The policy requires no medical check-ups to avail until the age of 55 years for those without medical history. The maximum assured sum is Rs 5 Lakh, and family floater cover is available. The plan also covers Ayush care and treatment. 

Private vehicle Insurance: 

The motor policy provides both third party liability of up to Rs 7.5 lakh and accidental death cover. The policy also offers an unclaimed bonus for policyholders along with add on covers at extra charges.  

Travel Insurance: 

SBI provides cover for trips of a single trip up to a maximum of 170 days. Multiple trips insurance is applicable for a maximum of 1 year. The maximum cover amount is $5,00,000, to be taken before the visit abroad. The Insurance covers covid-19 treatments as well. 

NATIONAL INSURANCE COMPANY LIMITED:

Motor vehicle Insurance: 

The policy has invariants of commercial vehicles, private cars, and two-wheelers, along with third-party Liabilityliability. It covers damages due to fire, burglary, and other external perils. At the same time, the former includes third party damages in case of a collision or accident and self-vehicle driver life cover. 

National Mediclaim Plus: 

The plan offers a high amount of assured value going to Rs 50 Lakh. The entry eligibility in the scheme ranges from 18 to 65 years. There are multiple options of individual or family cover to suit different customers. 

Standard Fire and Special perils Policy (SFSP): 

offers fire insurance to homes and office spaces when damaged by external causes. The cover is for structure plus internal appliances, natural calamities, and other spontaneous expenses. 

Marine Open Policy: 

An open cover is a contract for 12 twelve months, which gives the insured continuing security from risks to cover a large number of shipments or cargo. There is no specific sum assured, and it is dependent on the value of cargo.

TAX BENEFITS OF INSURANCE POLICIES

Apart from the primary purpose of protecting from risk, insurance policies also prove useful for taxpayers. Indian Income Tax laws allow comfortable space for including policy premiums in deductions when calculating an individual’s tax liability for the year. 

TAX ADVANTAGE FOR LIFE INSURANCE:

Insurance companies guarantee to pay a specified sum assured to the insured individual’s nominees if they kick the bucket during the policy term. Should the customer outlive the insurance span, many policies pay maturity benefits, which is a certain multiplied percentage of all premiums paid. There are tax benefits on these premiums as well as sum assured in a few cases. 

Section 80C – Individuals paying premiums on a life insurance policy, such as term, endowment, whole-life, money-back insurance policies, and Unit Related Insurance Plans are all eligible for a tax deduction 80C of the Income Tax Act, 1961. The maximum deduction which can be claimed will be Rs. 1,50,000.

Section 80CCC – For retirement. money-back, and pension plans, tax deduction under Section 80CCC of the Income Tax Act, 1961 can be claimed for any sum paid by insurance companies towards a pension or cashback. The maximum deduction that can be sought under this section is Rs. 1,50,000.

Section 10(10D) of the Income Tax Act exempts you from paying taxes on the amount you earn from the life insurance company. The value of the sum insured and the bonus applicable that are received on maturity or surrender of the policyholder’s policy or death will be considered tax-free for the nominee (s).

TAX ADVANTAGE FOR HEALTH INSURANCE:

To promote health insurance, the IT Act allows for the following deductions to individuals:

Section 80D – This allows for a maximum deduction for health insurance premiums to the extent mentioned in the table:

TAX ADVANTAGE ON MOTOR INSURANCE:

Motor vehicle insurance is allowed under section 80C, only on one condition. The taxpayer must submit proof to validate the vehicle is only used for business purposes. Private cars are not eligible for a deduction claim. 

CONCLUSION:

Since it is abundantly clear why one must buy an insurance policy, selecting an ideal plan is of equal importance. Hasty decisions in choosing an insurance plan may often result in problems later.

Conditions may exist that you might not want to abide, or features that you may not need. Your Premium depends on the features. Therefore, you do not want to pay more than you have to. A few things to keep in mind while buying an insurance policy are:

  • Conduct thorough research on the type of policy and offers of companies
  • You do not want to be looking at policy features from the surface alone. Know what happens when you miss or delay a premium. It is good to gain knowledge about everything before you invest your hard-earned money.  
  • Read terms and conditions before signing up and payment
  • You must read the policy brochure containing all terms and conditions. Insurance policies have specific criteria. Check your documents in advance since you do not want to be caught unaware of any situation that may render the policy useless when you need it the most. 
  • Look out for any lock-in period requirement.
  • Read to know the time from which you can claim your Insurance before you purchase any. 
  • Reveal all information sought by the insurance company, with evidence wherever asked. 
  • Life and health insurance policies may want thorough diagnostic tests before signing you up in their scheme. Do not hide anything from the companies, as they might eventually find out and deny your claim later.
  • Plan and decide on a suitable premium payment option.
  • Do not bite off more than you can chew. Premiums can be made regularly or a single time. They can also be paid monthly, semi-annually, or annually. It is wise to design your premium payments in a way that fits your budget the best way. 

2 Comments
  1. […] Insurance policies can also help you avoid a huge money outflow at a small expense. […]

  2. […] out the different types of insurance policies that can protect you from […]

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