Are You Insured?

Insurance

Insurance

Definition of Insurance

Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.

Insurance is a protection against any loss or damage for which the insurance is purchased, the purpose of Insurance is to protect and fulfill your family's financial needs in your absence.

Getting insured is the one of the major step towards the Financial Planning

Types of Insurance

  1. Health Insurance
  2. Life Insurance
  3. Term Insurance
Apart from above mentioned insurances there are many other types but for a middle class individual these 3 types serve the purpose

Why one should buy Insurance?

1. Health Insurance
  • Now a days medical expenses are very high and to get treated in well established hospitals with all the facilities will cost you hefty. And this may drain out all your life savings to treat some illness, hence to get rid of any such situation one should plan to buy health insurance at early age to reduce premium load.
  • This is a must buy Insurance policy
2. Life Insurance
  • Life insurance provides you security against your life and in some cases towards critical illness. life insurance generally provides you a security till you pay premium and after the maturity they will return you the sum assured with added bonus.
  • Example: If Ram buys a life insurance of Rs.10,00,000 and selected a tenure of 20 years. Then he needs to pay some fixed premium amount (monthly or quarterly or yearly) for 20 years.
  • If anything happens to Ram till the insurance coverage period ( 20 years in above case) then Rs. 10,00,000 and bonus will be given to the nominee of Ram.
  • If nothing is happened to Ram till 20 years then the total amount i.e Rs 10,00,000 + additional bonus will be paid to Ram             
3. Term Insurance
  • In this type of insurance the one who got the insurance will not get any benefit till he is alive.
  • Shocked by reading above line? Yes! then let us understand with an example. Let us say Ram buys a term insurance of 1 crore for 85 years then from the day one after purchasing the policy Ram will be covered under the policy terms. if Ram dies before 85 years of his age then total 1Cr will be given to the nominee and if he survives after 85 years then there will be no reimbursements.
  • But the point to be noted is the premium amount paid to get 1 crore policy is very very low as compared to life insurance policy
Plan and get yourself insured 

Comments

  1. I think everyone should get insurance..
    Good concept and explained nicely

    ReplyDelete
  2. Nice blog with complete information.

    ReplyDelete

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