What is insurance?
Insurance is a legal contract between two parties, the policyholder and the insurance-providing company, in the form of a financial protection policy. The policy covers the monetary risks of an individual due to unpredictable losses. The policyholder pays a certain amount to the insurance company against which the company assures that it shall cover the policyholder’s losses, subjected to certain terms and conditions.
Insurance coverage can be provided for medical expenses, vehicle damage, property damage and many more. Let’s discuss the insurance benefits, and its types.
An insurance policy comes with multiple benefits. Below are some of its most fundamental benefits of insurance:
1. Provides Protection
Insurance plans reduce the impact of loss that one bears in difficult situations. This helps in providing monetary assistance during financial crises. The insurance plan not only protects the insured from financial crises but also helps in checking mental stress arising out of the crises.
2. Provides Certainty
Insurance plans provide a feeling of assurance to the policyholders. The certainty that their investment will help in the future crises by providing financial aid, does not let them be tense.
3. Risk Sharing
In case a policyholder would not be able to pay from one’s capital then an insurance company comes with collective risk premiums because it covers a large number of risk-exposed people. The one who claims insurance coverage is out of the fund then all policyholders share the risk of the one who actually suffered the loss.
4. Value of Risk
Insurance policy safeguards against unforeseen events and losses by assessing the volume of risk and also anticipating the possible causes of it. It evaluates the amount for insurance plans.
5. Capital Generation
The money generated from the policyholders are invested by the insurance companies in stocks, mutual funds, and other productive channels, which helps in generating income and profit for the company. This guards against the loss of capital for the company.
6. Economic Growth and Saving Habits
Due to Insurance policies people are mobilized to do savings which provide financial stability. So Insurance policies inculcate saving habits among individuals. They save a portion of their income due to Insurance policies that will act as a guard for unknown future crises. The companies also provide insurance-cum-savings or insurance-cum-investment schemes. These companies also promote trade and commerce by utilizing the capital generated.
Insurance Coverage
1. Life Insurance
The greatest benefit of life insurance is that it protects the family from crises arising due to premature death or death during the tenure of the policy. If you go for life insurance, it provides the family with a good sum of money when the person, with whom insurance is done, meets with an untimely death.
How to apply for life insurance?
- First of all you need a proposal form, it is provided by the agent of the insurance company or you will get it at the company or through the company’s official website.
- Fill in the proposal form which has personnel information and also contains the terms and conditions of insurance, nature of insurance, type of policy, amount to be insured, mode of premium payable — yearly, half-yearly, quarterly and monthly.
- You need to go under medical examination from one of the doctors approved by the Life Insurance Company. In case you have a family disease, this formality will be more detailed.
- Then the company’s agent generates a report based on all your conditions needed to be noticed under the life insurance, like health, occupation, soundness of payment of premium, proper health and longevity of life.
- The Life Insurance Company accepts the proposal of the policyholder and trusting the agent, it also considers the doctor’s medical report.
- Then, you will be asked to submit proof of your age.
- After that you will have to pay the installment, you can pay it periodically.
- After all these formalities, you will be issued with the life policy. This life policy is a legal document between the insurance company and policymaker.
Insurance policies include risks in life like home, auto, education, and many. These are considered as general insurance policies.
2. Health Insurance
You can invest in health insurance. If in future any serious issue tries to hit you then the health insurance will help you. Some insurance companies provide hospital facilities if you buy their health insurance. In other cases, you can claim the health insurance for hospitalization and treatments. Before buying you need to check the coverage of the health insurance.
How to apply for health insurance?
- Find an agent or a broker who will lead you to different health insurance plans of various companies. Choose the best featured plan according to you and ask for the application form.
- Along with the form you need to give some other documents such as Proof of Identity, Proof of Age, Proof of Address, Passport-size photographs and
Medical reports. You can use Aadhaar Card, Pan Card, Passport, Driving License, Voter ID Card or Birth certificate.
- After all the formalities, you will be issued with the health insurance policy by the respective insurance company.
3. Education Insurance
Education is an investment if you Educate your child you will get a great return. You save for your child’s education, by the time your child attains the age decided as per the insurance policy, You can have a good sum of money pursuing your child’s educational purposes. Insurance companies also provide you calculators to estimate the amount you may need when the child grows up. The parent or legal guardian is the owner of the education insurance policy.
How to apply for education insurance?
Find a policy through an agent, a broker or you can also get it online on the concerned webpage of any insurance company.get the proposal form.
Along with the form you need to give some other documents such as
- Proof of Age through Birth Certificate, 10th /12th Mark sheet, and Passport.
- Proof of Identity through Aadhaar card, Passport, PAN Card, Voter ID.
- Proof of Income of the parents or the legal guardian.
Proof of Address through any of these –
- Telephone bill,
- Electricity bill,
- Ration card,
- Passport,
- Driving License.
- Passport-size photographs also.
After all the documentations submission, you will be issued with the education insurance policy by the respective insurance company.
4. Home/Property Insurance
If your valuable property is damaged by any calamities then this policy will cover the financial loss. The Losses due to theft, floods, or any other disaster can be made less severe.
How to apply for Home/Property insurance?
- Find an agent or a broker and ask for the proposal form for the plan of home insurance.
- Along with the form you need to give some other documents such as Aadhaar Card, Pan Card, Passport, Driving License, Voter ID Card or Birth certificate. You also need to give proof of your ownership of the property.
- Once the documentations and formalities are finished then you are eligible for insurance