Insurance is the weapon to deal with the possibility of any loss in future. We do not know what will happen tomorrow, so we try to compensate for the possible loss in the future through an insurance policy.
Insurance means protection from risk. If an insurance company insures a person, then the insurance company will compensate the financial loss to that person.
Similarly, if the insurance company has insured a car, house or smartphone, then in the event of breakdown, explosion, loss or damage of that thing, the insurance company gives compensation to its owner according to the pre-fixed condition.
Insurance is actually a contract between the insurance company and the insured. Under this contract, the insurance company takes a fixed amount (premium) from the insured and pays the insured or company compensation in case of any loss as per the terms of the policy.
What is the type of insurance?
Insurance is generally of two types:
1. Life Insurance
2. General Insurance
Life insurance covers the life of a person.
Life Insurance: Life insurance means that on the death of a person who buys an insurance policy, his or her dependent gets compensation from the insurance company.
If the head of the family dies prematurely, then it becomes difficult to manage the expenses of the household. It is necessary to take a life insurance policy to save the wife / child / parents etc. of the main person of the family from financial crisis. In financial planning, it is suggested to first of all buy a life insurance policy.
General insurance includes vehicles, houses, animals, crops, health insurance etc.
Home Insurance: If you insure your home with a general insurance company, then there is protection of your home. After purchasing an insurance policy, if your house suffers any kind of damage, then the insurance company pays for it.
Coverage from any damage to your home is included in this insurance policy. Damage due to natural disaster to the house includes damage due to fire, earthquake, celestial lightning, flood etc. Artificial disaster includes house damage, fire, fighting and riots etc.
Motor Insurance: In India, it is very important according to the law to insure a vehicle running on the road. If you drive your vehicle on the road without insuring it, then the traffic police can fine you. According to the motor or auto insurance policy, the insurance company gives compensation for any damage done to the vehicle. If your vehicle has been stolen or caused an accident, then auto insurance policy can help you a lot.
You get the most benefit of an auto insurance policy when a person is hurt or someone has died from your vehicle. It is covered under Third Party Insurance. If you also have a two-wheeler / three-wheeler or car, then it should be insured.
Health Insurance: Nowadays the cost of treatment is increasing very fast. On taking health insurance, the insurance company covers the cost of treatment in case of illness. Under a health insurance policy, the insurance company gives the amount spent on treatment in case of any kind of disease. The extent of expenses incurred on a disease depends on your health insurance policy.
Travel Insurance: Travel insurance protects against loss during a trip. If a person goes abroad for some work or to travel and he gets hurt or the goods are lost, then the insurance company gives him compensation. Travel insurance policy is valid only from the beginning of your journey till the end of the journey. Different insurance companies may have different conditions for a travel insurance policy.
Crop Insurance: According to the current rules, every farmer taking an agricultural loan is required to buy crop insurance. Under the crop insurance policy, the insurance company gives compensation to the farmer for any loss to the crop. Under the crop insurance policy, compensation is given by the insurance company in case of crop failure due to fire, flood or due to some disease.
Because of the condition of crop insurance policy being too stringent and not getting compensation according to the cost, there is not much enthusiasm towards crop insurance among the farmers. In fact, to pay compensation for crop failure, insurance companies survey all the fields around that farm and compensation is given only when the crop of most farmers is damaged.
Business Liability Insurance:
Liability Insurance is actually to compensate the loss of a customer from a company’s work or a product. In such a situation, the penalty incurred on the company and the entire cost of legal proceedings has to be borne by the insurance company that does Liability Insurance.