Insurance: Importance, Types, and Benefits

Insurance is a word that you must have heard before. Because nowadays, everyone insures his or her favorite things. Ranging from petty shopkeepers, businessmen, Job Persons e.t.c But there are people who do not understand insurance properly and get confused and never take it.

So today I’ll be giving you the basic knowledge about insurance like what is insurance, Types of Insurance and what are the benefits of having an insurance e.t.c.

What is Insurance ??

First of all, know what is an insurance? See if spoken directly, Insurance is a scheme in which an insurance company will give you or any other member of your family money in case of any loss like illness, accident or death and guarantees full support.

Let’s take another example to imagine you have taken car Insurance and someday your car gets damaged due to an accident, then in this situation, the insurance company is gonna help you financially to come out of this situation because you have taken their policy cover. Depending upon your policy and company’s terms and conditions the financial support and insurance claim varies.

Therefore, you should always understand the terms and conditions of the company before taking any company’s insurance policy. The higher the amount of insurance policy you take, the more you get cover. Nowadays almost everything is insured. In which the rate and rules of policies also differ.

How does insurance work?

The insurance company and the customer or you can say an insured person makes a legal contract for insurance, which is called an insurance policy. This Insurance Policy has all the details and terms and conditions related according to which the company helps you in the situation for which you have taken insurance.

Also read: What is Marine Insurance?

Basically insurance protects you and your family from financial loss. The insurance company provides you big cover for a very small premium because a very few of the people end up claiming the insurance so the insurance companies take this risk.

How to Buy an Insurance Policy?

You can buy any insurance policy of your interest through online or offline mode whichever suits you. There are agents out there on behalf of companies who can come to your home and you can have insurance policy while sitting in the comfort of your home or you can visit the Company office directly

Or you can have insurance using the internet but for that, you must be very careful while choosing a policy and understand the terms and conditions related to that policy.

Benefits of taking an insurance policy?

Besides the security and safety benefits of life insurance, you can also avail Tax Benefits of insurance too.

Under various sections of law like Section 80C or Section 80D, a person gets tax-saving deductions benefits on Life insurance premiums or medical insurance premiums.

Types of Insurance

Let us now talk about what are the types of insurance. There are many types of insurance, such as Life Insurance, Health Insurance, Vehicle Insurance, Accidental Insurance, Home Insurance, Travel Insurance among these terms and conditions of the policy and insurance cover varieties. The most popular of these insurance is “Life Insurance”.

Let’s know a little bit about all these one by one.

#1 Life Insurance i.e. Life Insurance Scheme

Life insurance is done by most people for their family only so that their family can get financial support if died. What happens in this policy is that whichever person takes this policy, after the death of that person their family member or the person who has been nominated by them, payment of the policy is given according to the terms and conditions of the policy.

#2 Health or Medical Insurance Scheme

The special thing about this policy is that if you get your health insurance, then when you fall ill, then the insurance company gives all the expenses of the hospital, including the operation and medicines. 

One disadvantage of health insurance is that if you take this policy for a year for a fixed amount and if you do not have any disease in that year, then the insurance company will not refund you any money. And next year you will have to renew the policy by paying the same amount again. But still it is very important for every human being to take this policy, it will definitely benefit you. Because nobody knows what’s going to happen the very next moment.

#3 Vehicle / Auto Insurance

Auto Insurance is equally important as Life Insurance and Health Insurance. Because almost everyone living in cities nowadays has a car or motorcycle/bike. And if you also have a car or motorcycle/bike then it is necessary to get it insured.

Because you cannot tell what happens when sometimes you can get an accident. Or your car may be stolen. In such a situation, if you have taken your Auto policy, then the insurance company helps you to fix your vehicle or to compensate for your loss according to the policy’s terms.

#4 Accidental Insurance Scheme

The biggest benefit of getting an Accidental Insurance Policy is that if you have an accident or get injured in an accident, then you will not have to bear any expenses. According to the name of your policy, the insurance company bears all your expenses.

#5 Home Insurance

Home insurance, According to your home and all the goods and structure of the house, a policy is made. In this, the insurance company compensates you in case of damage to both household or household items. This insurance helps in the situation of home damage, accident, fire, stolen goods e.t.c

#6 Education insurance

Every parent is worried about their child’s education and the amount of money that they have to spend for their higher education, here Education Insurance comes into rescue. This insurance gives your child a lump sum amount when they reach a certain age. You can use this fund for your child’s higher education or admission into college e.t.c

Apart from all these Insurance Policy, there are other policies like Travel Insurance, Farmer Insurance, Pet Insurance, Marriage Insurance.

I hope you will get some help from this article. If you want, you can also share this article with your friends. Thank you for taking your precious time to read this article.

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