What is an Insurance Plan?
Insurance is a way to protect yourself against risk or loss. The person taking an insurance policy is known as the insured. The insured usually pays some kind of monetary amount, known as a premium at regular intervals of time or as a lump sum amount one time. The payment cycle is decided by the entity providing the insurance cover, known as the insurer. As a result of this transaction, the insurer guarantees the insured financial cover to a certain pre-agreed amount in the case of certain situations occurring. These are covered under the insurance policy terms. Insurance is therefore a form of risk management to protect against perceived future risks or dangers. The contract signed between the insurer and the insured is known as an insurance policy.
Insurance policies can be purchased by individuals, groups of individuals or organizations. The benefits of the policy can be availed by the insurer himself, or they can be directed to some other person or persons, known as the beneficiaries, as defined in the terms of the insurance contract.
What are the benefits of buying an Insurance Plan?
Insurance plans help to mitigate some of the stress of loss or damages through a guarantee of financial stability. Insurance plans ensure benefits to family in case of death, help to secure the financial future of your children, help you to plan for an independent retirement and can also act as a backup of your health. You can compare insurance policies online for all of your needs and choose the best plan which has the lowest premiums and the maximum coverage. Insurance plans are offered in many different forms and come with several features. In a number of insurance plans, the premiums paid are deductible against tax. There are also a number of tax benefits under section 80C of the IT code. Thus, insurance plans offer a tax benefit enabled investment into your future.
What are the different types of Insurance Plans?
There are many different insurance plans available in the market today. Each of the insurers offering a policy have several options and plans to choose from. Insurance has become a highly specialized industry with customizable plans available in nearly all spheres of life. Broadly, these are the types of insurance policies available:
1. Life Insurance:
Life insurance is the most popular type of insurance policy on the market. There are a number of benefits that can be associated along with an insurance cover for your life. The sum assured in case of death is given to beneficiaries with additional death benefits and maturity benefits. You get tax breaks against life insurance premiums and in some cases, you can even borrow against the policy.
2. Health Insurance:
These plans are paramount to insure your family financially in case of hospitalization and illness. Health insurance policies can offer coverage against treatment costs, medical expenses, tests, consultations and other accommodation related expenses. The plans can be taken individually, or for the entire family.
3. Automobile Insurance:
These policies offer to protect your vehicle against accidents and damages. A car or bike insurance has become almost mandatory because of their universal acceptability and usefulness. Car insurance helps to protect your financially for repairs in case of accidents or damages.
4. Travel Insurance:
These plans offer various types of coverage for travellers, both domestic and international. These plans offer cover against loss of baggage, visa and passport loss, medical damages during travel, trip cancellation or rescheduling.
5. Home Insurance:
These plans are designed to protect your home against damages such as fire damage, flooding, and natural calamities such as landslides, cyclones etc. Home Insurance also offers coverage for assets and possessions that you have inside your home.
Why choose an Insurance Plan?
These days, financial stability and security is paramount at all stages of life. No matter what the crisis you face, if you have a solid monetary base, you are relieved of some stress and tension and can meet the challenge head on. Insurance Policies are tailored to provide just this kind of security to you and your family. Insurance helps you to set aside a portion of your earning towards managing risk and uncertainty that may crop up in your future. Whether it’s the future of your children, the safety of your home or the backup for failing health, insurance policies provide a lot of support in trying times.
How to choose an Insurance Plan?
While choosing an insurance plan, a number of factors need to be considered. You should decide the kind of coverage you would like to have, which further depends on the beneficiaries for your policies. It also depends on the premium value you want to invest in any particular policy. A general good practice is to check the claims settlement ratio of the insurer. This gives a good idea of the dependability of the insurer and the possibility of your claims being honoured. You should plan out how early you wish to start a particular policy, depending on when you wish the policy to mature and provide benefits.
When is the right time to buy an Insurance Plan?
This depends on the type of insurance you’re looking to buy. Insurance policies these days are highly specialized and cater to specific consumer needs. If you’re looking to insure your life to provide for your family in case of any unfortunate happenings, you should purchase life insurance as soon as you have dependents. This usually happens post marriage. If you wish to insure your home and assets against loss or damage, you should do so when you’re in the process of buying a home. Health insurance should be bought early on in life, to protect against the financial strains that come with fighting illness and disease. You can purchase insurance for your children when they’re born in order to ensure that they have a financially independent future with money for education and marriage. If you wish to secure your future post retirement, invest in a retirement plan early on to have stability and independence even after you stop work.
For a genuine and transparent advice on your Insurance Plan, call our advisors on 9948 661 204 and get a Free Consultation for the first time. Alternatively, submit our enquiry form and one of our Financial Advisors will get back to you at your convenience.
Our lines are open – Monday to Saturday: 8.30am – 7pm.