Insurance is one of the most effective risk management tools which can protect individuals and businesses from financial risks arising out of various contingencies. The emotional and psychological loss cannot be compensated, but at least the financial loss can be compensated with insurance. Though there are some uncertainties in life which you cannot mitigate, insurance will surely help you transfer the financial risk related to the same.
How does insurance work?
Types of insurance available
There are different types of insurance products available in India. Mainly,
insurance products are classified as:
- Life insurance products
- General insurance products
Must-have insurance products
As no one wants to leave their loved ones financially shattered, life coverage is one of the must-have for every individual having dependents. In case of life insurance, the amount of money assured or the coverage amount will be paid out to the nominee of the insured in the event of the death of the insured. Life insurance is a requirement to ensure the financial well-being of your loved ones even in your absence.
Health uncertainties are part of life. Acknowledging the rising cost of healthcare and an increasing number of diseases, it’s important to have the financial cushion to protect yourself against health contingencies. Health insurance policies are of various types such as individual health insurance, family floater health insurance, critical illness health insurance and senior citizen health insurance. It’s crucial to have adequate health insurance coverage that can protect you from financial crises during medical emergencies.
House is one of your most valuable possessions that also includes many precious belongings and memories. Although you try to secure it to the fullest, your property is exposed to various risks like theft, damages due to natural disasters etc. which you might not be able to mitigate completely. Therefore, in order to protect your home against losses and damages that may arise due to many insurable events, availing home insurance is the most effective solution.
Vehicle insurance policies are the mandatory legal requirement in India for every vehicle owner under the Motor Vehicle Act. Be it a bike, car or a commercial vehicle, it’s mandatory to avail third party liability vehicle insurance to protect oneself against the claims that may arise from another party in case of an accident. However, vehicle insurance policies come in a comprehensive package wherein your valuable assets (bike or car) are covered against the different risks of damage or loss along with your own accidental cover to you. Acknowledging the rising incidents of road accidents and the asset value, it’s most important to have a comprehensive vehicle insurance policy.
Travel insurance may be the priority for frequent travellers. But, it may not be needed for all. The requirement for insurance may vary depending on each individual’s unique needs. Let’s say, you are planning a domestic trip and your comprehensive health insurance plan covers you across the country for any medical emergencies, travel plans may not just be needed for you. More specifically, the travel insurance plan may not be your priority if you can afford to lose your pre-paid trip expenses.