Insurance Companies in India

The biggest twist is that the country’s Central Government can only legislate it. Insurance is a legal agreement between two parties, i.e., the individual and the insurance company. The individual is called “insured”, and the insurance company is called the “insurer”. In this pattern, the insurance company promises to make good the insured’s losses on the insured’s accident. The contingency is the event which causes an injury. It can be the damage/destruction of the property or the policyholder’s death. It’s called a contingency or accident because there is a doubt regarding the happening of the event. In return, the insured pays a premium for the promise made by the insurer. 

How does Insurance Work ?

The insured and the insurer receive a legal or a formal contract for the insurance, which is called the insurance policy. The insurance policy has details about the terms, conditions and circumstances under which the company will pay the insurance or the promised amount to either the insured person or the nominees. Insurance is a way of protecting a person and his family from a financial loss after an accident. Naturally, the premium for a huge insurance cover is much lesser in terms of money paid. The insurance company as an insurer takes this risk of providing a high cover for a small premium because very few insured people actually end up claiming the insurance. A person gets insurance for a big amount at a low price. Any company or individual can seek insurance from the insurance companies in India, but the decision to provide insurance is at the insurance company’s consideration. The insurance company will appraise the claim application to make a decision. Usually, insurance companies refuse to provide insurance to clients at high risk.

Types of Insurance

Insurance is such an effective risk management tool that can save individuals or businesses from economic risks arising out of various contingencies. There are many types of insurance policies available in India. Mainly, insurance products are: Life insurance products and General insurance products

Life insurance is the most essential of all the insurances. All of us should invest at least for it at any cost. Life insurance covers a person against the risk of death. Life insurance policies come in many forms such as endowment plans, term plans, whole life insurance plans, money back plans and unit-linked investment plans etc. There are many life insurance products which can be a great tool for long-term savings also as it comes as a combination of savings and protection. General insurance products cover financial losses caused by various risks that are other than death. General insurance products come in different types covering a wide range of risks such as health insurance, travel insurance, motor insurance, marine insurance, liability insurance, commercial insurance etc. Based on these two insurances, there are many insurance products induced by the central government and supported by the insurance companies in India. 

Life Insurance: Life Insurance is insurance on the client’s life. A client should buy a life insurance policy to ensure his dependents are economically secured in the accident of the client’s untimely death. Life insurance is particularly very significant if any person is the sole incoming person in the family or if the person is only the breadwinner for the entire family. In case the policyholder expires during the term of the policy, his family will be financially compensated under life insurance. 

Health Insurance: Health insurance should be bought to cover medical expenses for expensive treatments. Different types of health insurance policies cover classifications of diseases and health problems. A person can buy a specific health insurance policy from the insurance companies in India for specific diseases. The premium paid for a health insurance policy commonly covers treatment, medication costs, and hospitalisation. 

Vehicle/ Car Insurance: Nowadays, in India, car insurance is also an important policy. For any car owner, it is an essential step for the future safety of their vehicles. This insurance protects every passenger riding the vehicle against any unwanted accidents. Some policies are also there to compensate for damages to your car during natural fatalities like floods or earthquakes. It also covers third-party liability where a person needs to pay damages to other vehicle owners. 

Education Insurance: Child education insurance is quite similar to a life insurance policy. It has been specially induced as a saving and supporting tool. This fund can be used to pay expenses for the child’s higher education purposes

Home insurance: A home is a comfortable place for everyone. So, no one will leave their home in danger ever. Thus, home insurance policies can help with covering loss or damage caused to the home due to any mishaps like fire and other natural perils. It is important as, at the end of the day, home is the only place where people stay. So, safety must be there. There are other insurances like standalone critical illness insurance, travel insurance, etc. They are also holding a good part in Indian society.

Conclusion

There is a rumour of insurance privatisation as it is noticed that some of the public sector banks are getting privatised. Still, there is no strong evidence about this issue. However, it may be life insurance, general insurance or health insurance; a person can buy an insurance policy both offline and online. Just like there are insurance agents who are always ready to help people buy a policy, there are some dedicated websites where anyone can buy a policy. Now make that you have done your complete research before investing in an insurance policy.