what is insurance?

What is Insurance – importance in insurance

Share post

It is an ancient concept. Chinese and Babylonian merchants emerged as the first form of insurance to limit the loss of goods during inland transportation. This concept has evolved over time and has become a modern business that protects against various dangers. So, what is an insurance policy? Let’s understand the concept of insurance, infrastructure and the benefits that different types of insurance offer.

Insurance definition

It is a legal contract between two parties – a person or entity. That is financially protected (called an insurer) and compensation (referred to as an insurer) in exchange for money (premium) paid by the insurer. ) Promises to cater for it. . Simply put, insurance provides protection

Basically, the concept of this policy is to spread the risk of an organization to the individual or the larger society. Insurance is a risk management mechanism in which you transfer your risk to an company by paying premiums.

How does insurance work?

When you purchase an policy, you make regular payments to the company for the amount of risk cover you want. Companies pool funds paid by individuals and companies in this way, and then use them to compensate for losses and losses caused by insured events. Although it may seem simple, it is a complicated business. To understand the policy contract, you need to know its parts, terminology and terminology used in the contract.

Let’s take a look at some important policy jars.

  • Insurance: It is a party to an contract that provides you with financial coverage in the event that the policy does not cover a loss.

  • Insurable Interest: The uninsurable interest is the condition for every policy.

  • Beneficiary: An individual who is eligible to receive this policy proceeds if the insured person dies

  • Sum insured: Sum insured is the maximum amount that the company will pay you if the insured event takes place

  • Co-payment: Co-payment of copay is a fixed amount or a percentage of the claim amount that insured needs to pay before the insurer compensates the remaining.

  • Deductible: Deductible is the pre-decided portion of the loss that is paid by the insured.

The type of insurance

Various insurance products are available in the market. The list of types of insurance is not exhaustive. However, policies are broadly classified as follows:

insurance

What is life insurance?

It is an contract in which the insurer promises to pay a sum (also a guarantee) to the named beneficiary in lieu of the insured’s death.These plans provide coverage for a specific period of time. Unlike term insurance, which is the purest form of insurance, life insurance has many variants that come with the associated cost savings element.

Importance of life insurance

Some of the main reasons you need a policy plan.

  • Get financial security for your loved ones in the future even when you are not around

  • To secure our children’s future education and other needs

  • To settle unpaid debts to your family when you are not

  • Saving your golden years through pension plans

  • Achieve your long-term financial goals through disciplined investment in endowment or unit-linked plans.

  • Obtaining Tax Benefits under Section 80C of the Income Tax Act

Life insurance benefits

Life insurance products come with many benefits depending on the policy you receive. The main benefits of these plans or investments are:

  • Safety and security: death is inevitable. But unfortunate events such as death can have a devastating effect on those who depend on them. This policy provides the necessary protection when an insured family dies. A single whole family can help achieve financial stability. Ultimately, protecting a loved one’s life insurance will give you peace of mind.

  • Wealth Generation: These plans such as money back plans, endowment plans and unit-linked investment plans come with its associated ‘investment’ components. It helps you create wealth for yourself and your family’s future.

  • Tax Benefits: It is a financial product that receives tax-friendly treatment. The premium you pay for a policy qualifies for a tax deduction under section 80C of the Income Tax Act, thereby helping you to save tax. All income of life insurance is exempt from income tax under section 10 (10D) of the Income Tax Act.

What is General Insurance?

General insurance is an contract that does not cover life insurance. General insurance protects our health, vehicles, homes, businesses and many other things we value. There are a variety of these products available to protect against all kinds of dangers.

The Importance of General Insurance

General insurance is important for living a risk-free life. Risk is associated with our own and our homes, bikes, cars and businesses. Also, health is our real wealth. Maintaining our health is also important. The following are the reasons for making general insurance an essential requirement.

  • Provides financial protection to your health and property during unforeseen events
  • Reduce your tax burden by tax benefits and mitigation
  • General insurance provides coverage against a wide range of risks and helps you deal with contingencies quickly and effectively.

Policy for applying

Plans can be purchased online instantly depending on your need. Buying policy through Turtle is very simple and easy. Here are the simplest ways to buy policy online:

  • Login to the Turtlemint home page

  • Select the category

  • Once you click on the category, there are different types of plans available.

  • Depending on the type of plan you choose, provide your profile details such as gender, marital status, date of birth, income statement and contact details and more.

  • Once you have the profile details displayed, elaborate plans for the specific type of plan you choose will be displayed.

  • You can compare the plans of different companies side by side and choose the right one that suits your needs.

  • Once you have chosen the right plan, provide relevant details and continue to pay

  • Just! The required details may vary depending on the type of plan you are buying.

Frequently Asked Questions

  1. What is a Whole Life Insurance Policy? A full policy is a policy that creates cash value and provides you with lifetime security. As long as the insured is alive, the policy remains in effect.
  2. What is underwriting in policy? Underwriting in policy is a risk assessment process based on various factors surrounding the insured subject. For example, in life insurance policies, risk is assessed based on age, health history, medical reports, and more.
  3. What is the free-look period in insurance? Free-Look Period New policy holders give policyholders time to cancel the policy if they are not satisfied with the terms and conditions. However, the reason for the termination of the policy should be asked.
  4. What is the term for general policies? Generally, most general policies are one year. And policies are renewed on an annual basis.
  5. Do natural disasters cover motor insurance? Yes. Any damage or damage to a vehicle is caused by natural disasters such as flood, earthquake, storm, deadlock, landslides and rock.

Related post: History of health


Share post

About the author

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *