Mon. May 23rd, 2022
what are insurance types

When taking out health insurance, the insurance company covers the cost of treatment in case of illness.

Insurance is an effective tool for dealing with future losses. We do not know what will happen tomorrow, so we try to cover future losses through an insurance policy.

Insurance means protection against risk. If an insurance company insures a person, the insurance company will cover that person’s financial loss.

Similarly, if the insurance company insures a car, home or smartphone, in the event of a break, break, loss or damage to that item, the insurance company compensates its owner according to a pre-determined condition.

Insurance is actually a contract between the insurance company and the insured. Under this agreement, the insurance company takes a certain amount (premium) from the insured person and pays compensation to the insured person or company in case of any loss as per the terms of the policy.

How many types of insurance?

There are usually two types of insurance:

  1. Life insurance
  2. General insurance

In life insurance, a person’s life is insured.

Life Insurance: Life insurance means that after the death of the person purchasing the insurance policy, his dependent receives compensation from the insurance company.

If the head of the family dies prematurely, it becomes difficult to run the household expenses. It is necessary to take a life insurance policy to protect the wife / children / parents etc. of the head of the family from financial crisis. In financial planning, an individual is first advised to purchase a life insurance policy.

What is insurance simple words
What is insurance simple words

General insurance covers all vehicles, houses, animals, crops, health insurance, etc.

Home Insurance: If you insure your home with a general insurance company, your home is protected. After purchasing an insurance policy, if your home is damaged in any way, the insurance company pays compensation.

 

This insurance policy covers coverage against any damage to your home. Damage to houses due to natural disasters includes damage due to fire, earthquake, thunderstorm, flood etc. Artificial disasters include theft, fires, fights, etc.

Motor Insurance: In India, it is very important to insure any vehicle on the road as per the law. If you drive your car without insurance, the traffic police can fine you. According to the motor or car insurance policy, the insurance company pays compensation in case of any damage to the vehicle. If your car is stolen or due to an accident, a car insurance policy can help you a lot.

You get the most out of a car insurance policy when your vehicle causes a person to be injured or killed. It is covered by third party insurance. If you also have a two wheeler / three wheeler or car, it must be insured.

Health insurance: Nowadays the cost of treatment is increasing very fast. When taking out health insurance, the insurance company covers the cost of treatment in case of illness. Under a health insurance policy, the insurance company pays for the treatment of any type of illness. The spending limit for any illness depends on your health insurance policy.

Travel Insurance: Travel insurance protects against loss during a trip. If a person goes abroad for work or travel and he gets injured or loses property, the insurance company compensates him. A travel insurance policy is valid from the beginning of your journey to the end of your journey. Different insurance companies may have different conditions for a travel insurance policy.

Crop Insurance: According to the existing rules, every farmer has to buy crop insurance to get agricultural loan. Under the crop insurance policy, the insurance company compensates the farmer in case of any crop damage. Under the crop insurance policy, compensation is paid by the insurance company if the crop is damaged due to fire, flood or any disease.

 

Farmers are not enthusiastic about crop insurance as they do not get compensation as per strict conditions and cost of crop insurance policy. In fact, in order to compensate for crop failure, insurance companies survey all the fields around the farm and pay compensation only when most of the farmer’s crop is damaged.

Business Liability Insurance:

Liability insurance is actually the loss caused to the customer by the work of a company or a product. In this case, the liability insurance company will have to bear the full cost of fines and legal proceedings against the company.