Types of Insurance

Insurance is a legal agreement between an individual and the insurance company, under which, the insurer promises to provide financial coverage (Sum assured) against contingencies for an amount (premium). The types of insurance in India can be broadly divided into two categories:

• General Insurance
• Life Insurance

Following are the types of insurance available in India:

General insurance policies are one of the types of insurance that offer coverage in the form of sum assured against the losses incurred other than the death of the policyholder. Overall, general insurance comprises different types of insurance policy that offer financial protection against losses incurred due to liabilities such as bike, car, home, health, and similar. These various general insurance types of insurance policies include:

Health insurances are types of insurance policy that covers the expenses incurred due to medical care. Health insurance plans either pay or reimburse the amount paid towards the treatment of any illness or injury. Different types of insurance policy cover varied medical care expenses.

It usually offers protection against:

• a) Hospitalization
• b) Treatment of critical illnesses
• c) Medical bills post hospitalization
• d) Daycare procedures

• 1) Individual Health Insurance: Offers coverage to only an individual.
• 2) Family Floater Insurance: Allows your entire family to get coverage under a single plan, which usually covers husband, wife, two children.
• 3) Critical Illness Cover: Specialized types of health insurance that offers coverage against various life-threatening illnesses like stroke, heart attack, kidney failure, cancer, and similar others. Policyholders get a lump sum amount on diagnosis of a critical illness.
• 4) Senior Citizen Health Insurance: These types of insurance plans cater to all individuals above 60 years of age.
• 5) Group Health Insurance: Offered by an employer to its employee.
• 6) Maternity Health Insurance: This insurance type covers medical expenses for prenatal, post-natal, and delivery stage, offering protection to both the mother and the newborn.
• 7) Personal Accident Insurance: These types of insurance plans cover financial liabilities arising due to accidental injuries, disability, or death.

Motor insurances are types of insurance that offer financial assistance in case your bike or car get involved in an accident. Various types of Motor insurance policies in India include:

• 1) Car Insurance: Individually owned four-wheelers are covered under this plan. The car insurance types include- third-party insurance and comprehensive cover policies.
• 2) Bike Insurance: These are types of insurance policy where individually owned two-wheelers are covered against accidents.
• 3) Commercial Vehicle Insurance: This is one of the insurance types, which offers coverage to any vehicle used for commercial purposes.

As the name suggests, a home insurance policy offers comprehensive protection to the contents and structure of your house against any physical destruction or damage. In other words, this insurance type will provide coverage against any natural and human-made calamity, such as fire, earthquake, tornado, burglaries, and robbery.

Different types of home insurance policies include:

• 1) Home Structure/Building Insurance – Protects the structure of the house against damage during any calamity.
• 2) Public Liability Coverage – Provides coverage against any damage to a guest or third-party on the insured residential property.
• 3) Standard Fire and Special Perils Policy – Coverage against damages caused due to fire outbreaks, natural calamities (e.g., landslides, rockslides, earthquakes, storms, and floods), and anti-social human-made activities (e.g., explosions, strikes, and riots).
• 4) Personal Accident – Provides financial coverage to you and your family against any kind of permanent dismemberment or sudden demise to the insured individual, anywhere around the world.
• 5) Burglary and Theft Insurance – Provides compensation for stolen goods in case of a burglary or theft.
• 6) Contents Insurance – Provides compensation for loss of furniture, vehicles, and other appliances in case of a fire, theft, flood, or riots.
• 7) Tenants’ Insurance – Provides financial protection to you (as a tenant) against any loss of personal property living in a rented house.
• 8) Landlords’ insurance – Provides coverage to you (as a landlord) against contingencies such as public liability and loss of rent.

Fire insurance policies are different types of insurance coverages that compensate any losses incurred due to a fire breakout with a sum assured. These types of insurance policy usually provide a significant amount of coverage to help both individuals and companies to reopen their places after incurring extensive damage due to fire. These insurance types cover war risk, turmoil, riots losses as well.

• Valued policy
• Specific Policy
• Floating Policy
• Consequential Policy
• Replacement Policy
• Comprehensive Fire insurance policy

As the name suggests, travel insurance is a type of insurance policy, providing financial protection for you and your loved ones while you are visiting any place in India or abroad. Whether you are travelling solo or with your loved ones, the travel insurance coverage will help ensure that you have a peaceful journey.

The travel insurance policy coverage takes care of any issues that you may face during your trip such as loss of baggage, flight cancellations, loss of passport, personal and medical emergencies. Different types of travel insurance policies include:

• 1) Domestic Travel Insurance: Within the country
• 2) International Travel Insurance: For any trips or vacations outside of India
• 3) Individual Travel Insurance: If you are travelling alone
• 4) Student Travel Insurance: If you are going abroad for further studies
• 5) Senior Citizen Travel Insurance: For senior citizens, ageing between 60 to 70 years
• 6) Family Travel Insurance: For any family vacations

Life insurance plans offer coverage against unfortunate events like death or disability of the policyholder. Besides financial protection, there are various types of life insurance policies that allow the policyholders to maximize their savings through regular contributions into different equity and debt fund options.

You can choose a life insurance policy to secure your family's financial future against life's uncertainties. The policy coverage comprises of a large amount, which is payable to your loved ones if anything happens to you. With this insurance type, you have the flexibility to choose the life insurance policy period, coverage amount, and payout option based on the financial requirements. Different types of life insurance policy are as follows:

• Term Life Insurance
• Whole Life Insurance
• Endowment Plans
• Unit-Linked Insurance Plans
• Child Plans
• Pension Plans

Amount paid toward premium for different types of life insurance plans is tax-deductible

Although Life insurance coverage and its premiums depend upon various factors, but some important ones are:

• Age of the policyholder
• Health conditions – both current and history
• Occupation
• Smoking and drinking habits
• Type of insurance policy
• Claim history
• Location