5 Types of Insurance and Which One is For You?

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    Life can be unpredictable and in absence of a plan, it can disrupt your family’s financial wellbeing. To avoid these circumstances, different types of insurance plans are available in India that offer comprehensive coverage and protection to you as well as your loved ones.

    However, buying an insurance policy is a serious financial decision that you must take after proper due diligence and forethought. You can also use helpful tools like an insurance calculator to make an informed, objective investment decision.

    Let us discuss some of the insurance plans available out there and how to choose the right one for your needs.

    Life Insurance

    Life insurance is one of the most important policies you can add to your financial portfolio. It gives your family the much needed financial security in case something untoward happens to you. This is especially true if you are the sole earning member, supporting your family’s financial needs.

    In such an event, your untimely death can create a void that has the potential to devastate your loved ones’ lives. But with a life insurance plan in your portfolio, you can mitigate this risk significantly.

    Some most common types of life insurance policies are as follows:

    • Term plan: This is the most basic type of life insurance plan that offers comprehensive coverage for a small premium. You can use an insurance calculator to assess the accurate sum assured that you would need to cover all your family’s financial needs in case of your absence.
    • Endowment plan: In these plans, a portion of your premium is used to fund the death benefit and the remaining is invested by the insurer to give you a maturity benefit after a certain period of time.
    • ULIP: They are similar to endowment plans but a part of your premium is used to invest in mutual funds while the remaining is invested towards your life insurance premium. An insurance calculator can be helpful in determining an affordable premium that you can pay affordably throughout the policy period.
    •  Whole Life Insurance: This life insurance covers your entire life and not just a specific time period.
    • Retirement plan: They are also known as pension plans that offer you a dual benefit of investment and insurance. A part of your premium is used to create a retirement fund and other part is invested in a life insurance premium.

    Health insurance

    A health insurance plan refers to a type of general insurance that provides you monetary assistance when you are admitted to a hospital for treatment. Some of these plans may cover treatment pre and post hospitalization as well.

    As the medical costs are rising at an exorbitant rate in India, it is important to invest in a health insurance to protect you from the expensive treatment costs. An insurance premium calculator will help you choose the right policy that you can afford with ease.

    Some health insurance plans available these days include:

    • Individual Health Insurance: These plans provide hospitalization cover only for one policyholder.
    • Critical Illness Cover: These are specialized health plans that offer an expansive coverage for certain specific types of illnesses, such as cancer. These plans provide a lumpsum benefit to the policyholder if they are diagnosed with one of the ailments listed in the policy document.
    • Maternity Health Insurance: As the name suggests, these plans cover all the pre-natal, post-natal, and delivery-related medical costs for the mother and the new-born child.

    Fire insurance

    These insurance policies compensate the policyholder for any losses incurred due to a fire breakout. The sum assured released can be used to rebuild their lives or businesses destroyed in a fire accident.

    These types of insurance cover losses in riot, conflict, war, risk, etc. Don’t forget to use an insurance calculator to assess the accurate sum assured required to adequately pay for the damages occurred from fire. 

    Travel insurance

    These type of insurance plans help provide safety to a traveller during their trip. It is a short-term cover that provides financial aid to a traveller at varied times, such as loss of baggage, cancellation of trip, accident on a trip, etc. Some common types of travel insurance products include:

    • Domestic Travel Insurance: In this policy, the policyholder is able to safeguard their finances when they are traveling in India.
    • International Travel Insurance: If you are traveling outside the country, then you need to take the international travel insurance that covers you against unforeseen circumstances, such as loss of passport, loss of baggage, medical emergencies, flight delays, etc.

    Property Insurance

    Property insurance plans are used to cover buildings or immovable properties that can either be your home or a commercial structure. In case of a damage to these buildings and the contents inside, you can claim financial assistance from the insurer.

    Here are some common property insurances in India:

    • Home Insurance: This policy protects your home from all kinds of damage caused due to earthquake, fire, explosion, etc.
    • Office Insurance: Protect your commercial property and all the expensive equipment inside with this insurance.

    Trusted insurance providers like Max Life Insurance recommend everyone to protect every aspect of their lives with the help of comprehensive insurance policies. However, be sure to assess your lifestyle and assets before adding these insurance products to your portfolio. You can also use the insurance calculator to calculate the premium and assess its affordability before making a purchase decision.

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