Types of Insurances

The Insurance industry has developed over a period of time, and is now one of the leading industries in the world. Organizations providing insurance cover a wide range of living and non living things, so much so that in the modern world there is hardly anything that cannot be insured.

Insurance basically guarantees a sum of money to the owner of a particular asset, where the owner whether an individual or a company is referred to as the “Insured”. The organization guaranteeing this money is the “Insurer”. The Insured pays a nominal amount to the Insurer which is known as the “Insurance Premium”. Insurance is broadly divided into two:

Life Insurance
Life Insurance is a contract by which the Insurer makes a certain payment to the Insured on the occurrence of a certain event like death or after a fixed duration of time. The various types of Life insurances prevalent in the Indian markets are:
1. Term Insurance – The Insured is covered for a fixed duration of time by the Insurer. In case of death of the Insured, the Insurer is liable to pay the money to the person nominated by the Insured. However if the Insured survives the duration of the insurance cover than the Insurer is not liable for any payment.

2. Permanent Life Insurance – In this case the Insured is covered either for his or her entire life or for a fixed period of time. The Insurer is liable to pay the person nominated the money due in the event of the death of the Insured. In case the Insured survives the duration than the payment still has to be made to the Insured. The Permanent Life Insurance has been modified by organizations to come up with the following products:

  • Endowment Policies
  • Money Back Policies
  • Annuity or Pension Policies
  • Unit Linked Policies
  • Children’s Policies
  • Mortgage Redemption Policies
  • Loan Cover Policies
  • Group Life Insurances
  • Participating and Non Participating Policies

General Insurance
General Insurance on the other hand covers almost anything and everything ranging from vehicles to household goods and is also commonly known as Non Life Insurance. The various types of insurance provided are as follows:

  • Home Insurance
  • Fire Insurance
  • Householder’s Package Policies
  • Personal Accident Insurance
  • Mediclaim Insurance
  • Motor Insurance
  • Small establishment / Shop Package Policies
  • Travel Insurance
  • Marine Insurance
  • Professional Indemnity Policies

Insurance has really come a very long way and more and more people are slowly realizing its importance. Whereas earlier it was viewed as an unnecessary expense, now it is viewed as a cheap and easy way to secure the future against contingencies.

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