Insurance –  Importance,  Types,  And  Advantages

What Is Insurance?

Insurance is a legal agreement among two gatherings; H. the company (insurer) and the person (insured person). In this, the insurer undertakes to repair the insured’s damage in the event of an insured event. Contingency is the event that causes loss. This can be the insured person’s death or the damage/destruction of property.  The insured pays a premium for the commitment made by the insurer.

How Does The Insurance Work?

The insurer and the insure arrive into a lawful contract about , which is known as an policy. The policy contains the conditions and also, circumstances under which the company pays the insured amount to the insured or named persons. Insurance remains a way of protecting yourself and your family from financial loss. As a rule, the premium for excellent coverage is much lower with the money paid. The insurer risks offering a high range for a low premium, as very few policyholders use the . It is why you get a large sum insure for a small price. Any person or company can apply for insurance with an company, but the decision to purchase is at the company’s discretion. The company reviews the claim application to make a decision. companies typically refuse to offer insurance to high risk applicants.

What Is Insurance There In India?

Insurance in India can remain divided into three categories:

Life Insurance

As the name suggests,. You gross-out life insurance to protect your survivors financially in the event of premature death. Life is vital if you are a sole earner or if your family is heavily dependent on your income. With life , the policyholder’s family receives financial compensation if the policyholder leaves during the contract term.

Health Insurance

Health is taken out for the medical costs of expensive treatments. Different types of health cover a wide variety of illnesses and ailments. You can get generic health as well as policies for specific diseases. Health premiums usually cover treatment, hospitalization and medication costs.

Car Insurance

Car insurance is an important policy for all car owners in today’s world. This protects you from adverse events such as accidents. Some policies also cover harm to your car caused by natural disasters such as floods or earthquakes. It also covers civil liability if you have to compensate other vehicle owners.

Education Insurance

Early childhood education is like life , specially designed as a savings instrument. Education can remain a great way to provide a lump sum once your child reaches advanced age and goes to college (18 years or older). This fund can then be use to wage your child’s university costs. With this , the child is the insured or the beneficiary of the funds, while the parent / legal guardian is the policy owner. The Education Planning Calculator can help you calculate how much money is spent on your children’s higher education.

Home Insurance

Home insurance can help cover loss or injury to your home due to accidents such as fire and other disasters or natural hazards, and home covers other cases such as lightning strikes, earthquakes, etc.

What Are The Tax Advantages Of Insurance?

In addition to the security benefits of , there are also tax benefits that you can take advantage of.

Life payments up to ₹1.5 lakh can be claime as a tax deduction under section 80C

Health premiums of up to25,000 for you and your family and 25,000 for your parents can remain claimed as a tax deduction per section 80D

These claims must be made when the tax return is submit electronically.

Conclusion

Whether it’s life insurance, health , or universal , you canister buy online and offline. Just as it  agents can help you get a policy, there are also websites where you can get a policy. Make sure you have researched before choosing and investing in an policy.

Also Read: Personal Finance – Income, Issues, Financial Planning Process, And More