Definations Of Insurance

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
Insurance is a legal agreement between two parties – the insurer and the insured, also known as insurance coverage or insurance policy.
Insurance is a contract of reimbursement. For example, it reimburses for losses from specified perils, such as fire, hurricane, and earthquake.

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How Does Insurance Work

Insurance is a way of protecting yourself and your family from a financial loss. Generally, the premium for a big insurance cover is much lesser in terms of money paid. The insurance company takes this risk of providing a high cover for a small premium because very few insured people actually end up claiming the insurance.
The insurer and the insured get a legal contract for the insurance, which is called the insurance policy. The insurance policy has details about the conditions and circumstances under which the insurance company will pay out the insurance amount to either the insured person or the nominees.

Importance Of Insurance

Apart from protecting individuals and businesses from many kinds of potential risks, the Insurance sector contributes significantly to the general economic growth of the nation by providing stability to the functioning of businesses and generating long-term financial resources for the industrial projects. Among other things, Insurance sector also encourages the virtue of savings among individuals and generates employments for millions.

1. Provides Safety and Security to Individuals and Businesses
2. Generates Long-term Financial Resources
3. Promotes Economic Growth
4. Provides Support to Families during Medical Emergencies
5. Spreads Risk

Some Important Sections Of Insurance

1. Section 80C: You can claim deduction of life insurance premium paid from your taxable income as per the provisions of Section 80C.
2. Section 80CCC: You can get deduction from your taxable income towards premium paid for Pension policies up to a limit of `1,50,000/-.
3. Section 80CCE: Under this Section, the overall limit for deduction under Sections 80C, 80CCC and 80CCD(1) is `1,50,000/-.
4. Section 80D: You can get deduction of premium paid towards health insurance policies taken for self, spouse, dependent children and parents.
5. Section 10(10D): Proceeds from Life Insurance policies are exempt, subject to conditions of Section 10(10D).
6. Section 10(10A): Payment received on commutation of a Pension policy is exempt from tax.

Types Of Insurance In Worldwide

There are many types of insurance in all over the worlds. In life, unplanned expenses are a bitter truth. Even when you think that you are financially secure, a sudden or unforeseen expenditure can significantly hamper this security. Depending on the extent of the emergency, such instances may also leave you debt-ridden. There are different types of insurance some are explained here-

• Life Insurance
• Motor insurance
• Health insurance
• Travel insurance
• Property insurance
• Mobile insurance

Life Insurance

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period. Under life insurance, the policyholder’s family is financially compensated in case the policyholder expires during the term of the policy. 

Motor  Insurance

Vehicle insurance is also known as car insurance, motor insurance, or auto insurance. This insurance is for Private cars, Motorizes two-wheelers and Commercial vehicles excluding vehicles running on rails. The insurance companies protects us against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy. The specific terms of vehicle insurance vary with legal regulations in each region.

Health Insurance

A health insurance policy is a financial safeguard that provides medical coverage to the insured during healthcare emergencies. Medical emergencies can occur at any moment, without any prior notice. In such cases, a health insurance policy is your saviour.

The monsoon season is round the corner and this means monsoon-related diseases will be on the rise. Apart from the seasonal diseases Covid-19 cases are also on the rise in some parts of the country. Experts have also warned us about the possibility of Covid-19 fourth wave. The ideal and safe way to be prepared is to follow Covid-19 protocol and also buy a health insurance plan.

Travel Insurance

Travel insurance provides financial protection if you face certain problems when you’re travelling or on holiday. It covers medical expenses, lost luggage, flight cancellations, and other losses that a traveller can incur while travelling. Travel Insurance is usually taken from the day of travel till the time the traveller reaches back. Taking Travel Insurance ensures a comprehensive coverage in case of any emergency in another country.

Travel insurance cover things like-

• lost or stolen bags.
• emergency medical expenses, such as the cost of treatment and getting you home.
• the costs of cancelling, delaying or cutting your trip short.
• disruptions to travel or accommodation, such as delays and cancellations.
• legal costs, in case you’re sued for damaging property or causing injury.

Property Insurance

Property insurance is a broad term for a series of policies that provide either property protection coverage or liability coverage for property owners. Property insurance provides financial reimbursement to the owner or renter of a structure and its contents in case there is damage or theft and to a person other than the owner or renter if that person is injured on the property.

Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided.

Mobile Insurance

Mobile phone insurance has recently started gaining attention although not many smartphone owners are aware of it or are willing to purchase it. Loss or thefts of smartphones have become commonplace, making it all the more important for owners to insure their devices. For higher value smartphones, this protection is even more important as they are very lucrative targets for theft.

Types Of Mobile Insurance Coverage

• Internal parts damage affecting the working of the phone, for example, due to water spillage.

• Hardware failure such as malfunctioning of the touchscreen, faulty earphone jack or charging port issue.

• Damage caused by fire.

• Damage due to riot, strike, terrorist activities.

• Damage caused due to malicious intent.

• Screen damage.

• Loss of device due to theft, house break-in, burglary.

• Loss of device from a securely locked vehicle or building.

• Damage to the interior or exterior components of the device