Insurance
What is Insurance?
Insurance provides financial protection against unexpected losses. In exchange for a premium, the insurer promises to compensate the insured in case of a covered event, such as an accident, damage, illness, or death.
It works on the principle of risk-sharing, where many people contribute to a common pool, and those who suffer losses are compensated from this pool. The party providing the coverage is the insurer, and the person or entity receiving the protection is the insured.
Why Do You Need Insurance?
Financial Protection
Insurance protects valuable assets from risks like fire, theft, or illness.
Uncertainty Management
You can’t predict risks, but insurance ensures compensation if they occur.
Encourages Saving
Insurance (especially life plans) promotes savings among low and middle-income families.
Supports Economic Growth
Premiums collected are invested by insurers, contributing to the economy.
How Insurance Works
- A group facing similar risks pays premiums to form a pool of funds.
- When an insured event occurs, the loss is compensated from this pool.
- This spreads the financial impact of loss across many contributors.
General Insurance
Covers non-life assets:
- Vehicles
- Property
- Liability
- Health
Its purpose is to protect from financial loss or liability due to covered events.
Mediclaim (Health Insurance)
Rising medical costs have made health insurance essential. It helps pay for:
- Hospitalization
- Surgeries
- Pre/post-natal care
- Alternative treatments (Ayurveda, Homeopathy, etc.)
Family health insurance is popular as it covers all members under one plan
Special packages are also available for:
- Pregnancy & childbirth
- Newborn care
Mediclaim ensures access to timely and quality treatment without financial stress.
Types & Purposes of Insurance
Life Insurance
Term Plans
Affordable protection for young/low-income earners.
Children Plans
Secure funds for marriage or education.
ULIPs
Combine insurance and investment.
Endowment Plans
Offer savings + protection.
Money-Back Plans
Provide periodic returns, liquidity, and risk cover.