An insurance plan or policy is a contract signed between the person taking the policy and the insurance company. In this contract, a person taking the policy pays a regular sum to the insurer. On the other hand, the insurer pays off the sum assured to the beneficiary in case of eventualities.
So, insurance means protection against financial loss. It is used as a hedge against the risk of unforeseen conditions. There are different types of insurance policies present, providing a wide range of services. Based on the services offered, the insurance policy has been divided into eight types. These are:
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Health insurance
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Life insurance
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Motor insurance
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Travel insurance
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Mobile insurance
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Cycle insurance
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Bite-size insurance
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Property insurance
Let us give you a brief on what each insurance covers-
Life Insurance – A total of seven types of insurance policies come in this product category, namely term plan, united linked insurance plan or ULIP, child’s plan, endowment plan, whole life insurance, retirement plan, and money-back plan. All these plans provide exclusive benefits to the policyholder. With the life insurance plan, you can enjoy the following benefits depending upon the plan that you choose-
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The life insurance plan provides you with tax benefits.
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It encourages the money-saving habit.
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It ensures the financial stability of family members after you.
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It secures your loved one’s life by offering a pension and lump-sum amount after you.
Motor Insurance – This policy offers you financial assistance in case of an accident that involves a bike or car. Insurance companies have further divided this insurance policy into three categories. These are car insurance, two-wheeler insurance and commercial vehicle insurance. Depending on the protection and level of cover, the motor insurance policy has been categorized further into three types. It is third-party liability, own damage cover and comprehensive cover. The advantage of having motor insurance are:
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It prevents legal hassle.
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If you end up injuring someone or any property during a vehicle accident. The policy helps you compensate for the loss.
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It provides financial assistance to repair damage caused to a vehicle due to an accident.
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Motor insurance helps you reclaim the on-road price of the vehicle in case of loss or theft.
Motor insurance also provides tax benefits if you own a commercial car or two-wheeler vehicle and pay a premium of the same.
Health Insurance – With increased medical expenses in India, buying health insurance is the need of time. There are eight types of health insurance. They are individual health insurance, critical illness cover, family floater insurance, senior citizen health insurance, maternity health insurance, group health insurance, personal accident insurance, preventive healthcare plan. The benefits of health insurance include,
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The insurance offers financial coverage for medical expenses.
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You can claim cashless benefits if you are taking treatment in a hospital that has a tie-up with your insurance service provider.
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Individuals paying health insurance premiums also get income tax benefits under section 80D.
Travel Insurance – The travel insurance policy takes care of the financial safety of the traveller when he/she is in transit. Different types of travel insurance plans are available in the country. They are domestic travel insurance, home holiday insurance and international travel insurance. The benefits of travel insurance are:
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It covers the loss that happens due to flight delays and cancellations.
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The policy helps you get monetary assistance if you happen to lose your baggage during a trip.
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If you lose some of your important documents in transit, the international travel insurance will provide you with an amount for regaining those documents.
Property Insurance – The property insurance plan provides financial protection to the property. It covers any building and immovable structure. Different types of property insurance plans are home insurance, shop insurance, building insurance and office insurance. The benefits of property insurance include:
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It protects the property against fire.
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It protects against burglaries, natural calamities and floods.
Mobile Insurance – Considering the rising price of mobile phones and other gadgets mobile insurance is imperative. It covers phone theft and repairing charges in case of damage. Various benefits of mobile insurance are
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It provides complete protection to the new device.
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It covers damage to the screen.
Cycle Insurance – The cycle insurance is similar to motor insurance. The only difference is that it covers bicycle insurance. The benefits of this insurance are also the same as motor insurance.
Bite-Size Insurance – This insurance plan protects finances against specific threats for a year. Example: If you live in an area prone to malaria, you can take an insurance policy that covers malaria disease. It will provide you protection for one year. The benefit of bite site insurance are:
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It provides financial protection for one year at a very affordable cost.
Hope we have helped you in understanding various types of insurance. In case you have a query do drop us a line in the comment.
