What is Insurance?

In India, we’ve several different insurance policies to take care of every aspect of our life, be it life, health, or assets. Insurance plans available in the market provide financial protection to you, your loved ones, and your assets/property. But before you buy any insurance policy, it is imperative to understand the different types available in the market and choose the ones that fulfil your needs.

But before we give you a walkthrough on the different insurance plans, let us understand what insurance is.

An insurance policy is a document between you (the policyholder) and the insurer. It mentions that the insurer will provide financial coverage in case of emergencies in exchange for the said premium amount. In India, several insurance plans are available in the market but are broadly classified into two sections -

  1. Life Insurance

  2. General Insurance

Further, these sections have different types of insurance plans under them.

Types of Insurance Plans in India

The table below has the types of insurance policies available in the Indian market.

Life Insurance

Some common types of life insurance plans in India are as follows:

General Insurance

The different types of general insurance plans are as follows:

Let us discuss each section and its subtypes in detail.

Life Insurance in India

Life is full of bittersweet memories and events. Any sudden situation can turn yours and your family’s life upside down, that too without prior warning. While you cannot anticipate when a disrupting life-event happens, you can certainly keep yourself and your loved ones prepared. One way to provide this security blanket is by buying a life insurance policy.

Life insurance is a policy that ensures financial security to your loved ones in case of your death or disability. A few life insurance plans also provide financial protection after retirement for a certain period. In all, a life insurance policy is known to secure you and your loved ones financially during life uncertainties.

You can choose to pay for your life insurance policies as a lump-sum amount or in instalments over a specific period. The amount you pay towards the policy is known as premium. In return, your insurer promises to financially protect you and your loved ones in case of any unforeseen life event.

You can avail the benefits of the policies, depending on the type of life insurance product you purchase. The table below gives a brief overview of the different types of life insurance plans and their benefits.

Term Insurance

  • It is one of the most basic and affordable life insurance products.

  • As the name suggests, it covers you for a specific timeframe.

  • With this policy, your loved ones will receive a lump-sum benefit after your death.

  • The amount received is tax-free and can be used by your dependents as and when needed.

  • However, if you survive the policy term, no benefits will be paid to you or your family.

  • Additionally, you can use the term insurance calculator to determine the cost of the policy based on your desired coverage and rider benefits.

Whole Life Insurance

  • As the name suggests, the policy covers you for a lifetime.

  • Your loved ones will receive compensation in the event of your unfortunate demise.

  • Moreover, your dependents are also entitled to a bonus that usually accumulates on the policy over time.

Endowment Plan

  • Much like term life insurance, this policy covers you for a specific period.

  • A lump-sum benefit is given to your family in the event of your sudden death.

  • However, unlike term insurance, you are entitled to receive maturity benefits after the policy term is over.

Unit Linked Insurance Plan (ULIP)

  • ULIP provides dual benefits – life insurance cover and investment.

  • A part of the premium is used for life insurance cover; whereas the remaining amount is invested in equity or debt funds.

  • The policy pays a lump-sum benefit from the life insurance cover to your loved ones after your death.

  • Additionally, it also pays the returns gained from the investments.

Child Plan

  • As the name suggests, the policy provides financial security to your children.

  • In case you die, your child receives a lump-sum amount.

  • Additionally, your child receives a certain amount after every specific milestone they achieve.

Pension Plan

  • This policy allows you to build your retirement fund.

  • That way, you continue to receive money, even after your retirement.

  • However, the sum assured can be claimed by your loved ones after your death.

Tax Benefits on Life Insurance

  • The amount you paid towards your life insurance plans can be claimed for deductions under Section 80C of the old income tax regime. However, you can claim up to Rs. 1.5 Lakh under this section.
  • Moreover, the premium amount used for a tax deduction cannot exceed 10% of your sum assured amount.

  • The death and maturity benefits received on the policies are tax-free under Section 10(10D) of the Income Tax Act, 1961.

Exclusions in Life Insurance

The most common exclusion in life insurance plans states that if the death of the insured occurs due to:

  • Intoxicating items such as alcohol or drugs

  • War or terrorism

  • Suicide or any other self-inflicting injuries

  • Gross negligence or carelessness on their part

Then the death benefit will not be paid to the beneficiaries of the policy.

Now that we’re all caught up on what life insurance is, let us proceed to understand general insurance.

General Insurance in India

General insurance is a legal contract between you (the policyholder) and the insurer that provides financial protection for the loss incurred other than death. Basically, a general insurance policy will compensate for the financial loss incurred due to liabilities such as your home, motor vehicle, and travel.

The insurer will pay a lump-sum amount to cover the damage/loss to your motor vehicle, medical expenses for unforeseen emergencies, the loss incurred due to fire or theft, and financial issues during your travel.

We’ve discussed each general insurance product along with their benefits in detail below. 

1. Health Insurance 

A health insurance plan covers the expenses incurred due to sudden medical contingencies. You can either avail a cashless claim facility at a network hospital enlisted by your insurer or claim of reimbursement after completing the treatment. Things that are usually covered in a standard health insurance plan in India are as follows:

  • Hospitalisation and medical expenses

  • Treatment of enlisted critical illnesses

  • Pre- and post-hospitalisation expenses

  • Daycare procedures

  • Maternity and newborn cover

In addition to these benefits, health insurance also provides tax benefits. You can claim a deduction on the premium amount as follows:

Health Insurance For

Tax Deduction on Premium

Total Tax Deduction

You + Your Parents (All below 60 years old).

Rs. 25,000 + Rs. 25,000

Rs. 50,000

You (if you are below 60 years old) + Your Parents who are senior citizens

Rs. 25,000 + Rs. 50,000

Rs. 75,000

You (if you are a senior citizen) + Your Parents who are senior citizens

Rs. 50,000 + Rs. 50,000

Rs. 1 Lakh

Furthermore, if you are worried about the cost of the policy, use the health insurance calculator to determine the premium rates. Based on the results, you can shortlist your options and choose a health plan that fulfils yours and your family’s medical needs.

Exclusions in Health Insurance

A few things a health insurance plan does not cover are as follows:

  • Medical treatment or hospitalisation due to war or other such activities

  • Medical expenses arising due to alcohol or drugs

  • Any claims arising during the policy waiting period

  • Diagnostic charges if the report does not confirm the covered disease

  • Self-inflicted injuries

If you have any doubts regarding the exclusions in your health insurance plan, it is best to get in touch with your insurer and get them resolved as soon as possible. 

2. Motor Insurance 

Motor insurance provides financial protection to your motor vehicle in case of damages/loss due to accidents, theft, and natural or man-made disasters. You can buy motor insurance for your private as well as commercial vehicles. Moreover, motor insurance is a mandatory policy under the Motor Vehicles Act, 1988.

There are two types of motor insurance plans available in India. 

A) Car Insurance Plan 

Buying a car is a dream of millions of Indian. But with buying such a precious possession comes with several responsibilities. You have to ensure that you maintain it regularly and have an adequate car insurance plan to financially protect it against unforeseen events like accidents or theft.

In India, you can either buy a third-party car insurance plan or comprehensive car insurance plan, depending on your requirements. A third party car insurance plan covers third-party liabilities only. The policy is affordable but offers limited coverage. A comprehensive car insurance plan, on the other hand, provides extensive coverage. It covers third-party liabilities and damage to your vehicle as well.

Besides, you can enhance the scope of your comprehensive car insurance plan with add-on covers. For a slightly high premium rate, you can provide your car with all-around protection with a comprehensive plan. If you are worried about how much the policy will cost you, use the car insurance calculator to determine the same.

Exclusions in Car Insurance

A few things that are commonly not covered in car insurance plans in India are as follows:

  • Damage or loss to the vehicle when the policy is inactive

  • Loss of personal belongings inside the car unless you have an add-on benefit to cover the same

  • Damage or loss due to the car when driving without a valid licence

  • Damage or loss when driving under the influence of intoxicants

  • Damage due to war-like activities or nuclear risks

You can get in touch with the insurer to understand the exclusions of your car insurance policy before purchasing it. 

B) Two Wheeler Insurance Plan

bike insurance policy is a financial protection plan for your motorcycle. So, whether you ride a scooter or bike in India, you will need a bike insurance plan. Similar to car insurance, bike insurance is also available in two types: third party bike insurance and comprehensive bike insurance.

A third party bike insurance has limited coverage as it covers third-party liabilities only. If you want extensive coverage for your two-wheeler, it is best to buy comprehensive bike insurance. Also, you can buy add-on covers to enhance the scope of the comprehensive policy as per your needs. If you are wondering how much premiums you have to pay towards a comprehensive bike insurance plan, use the bike insurance calculator for the same.

Lastly, know that if you want to ride your bike or drive your car legally in India, it is mandatory to have a valid motor insurance plan. Failing to present the document when asked by the traffic police officer can lead to a hefty fine. Besides, the absence of a valid motor insurance plan during accidents or other unfortunate events can lead to claim rejections.

Exclusions in Two Wheeler Insurance

A few things that are commonly not covered in bike insurance plans are as follows:

  • Basic wear and tear of general component of the bike

  • Mechanical or electrical breakdown of the motorcycle

  • Damage or loss due to the bike when riding without a valid licence

  • Damage or loss when riding under the influence of intoxicants

  • Damage due to war-like activities or nuclear risks

For resolving any doubts, get in touch with your bike insurance provider immediately.

3. Travel Insurance

As the name suggests, a travel insurance plan protects you against any financial liabilities (medical or otherwise) during your travel abroad or within India. The things that are usually covered under a standard travel insurance plan are as follows:

  • Baggage loss

  • Sudden medical contingencies

  • Passport loss

  • Hijacking

  • Flight delay/cancellation

  • Accidental deaths

Based on your preferences, you can buy an individual travel insurance plan, a family travel insurance plan, or student travel insurance plan.

Exclusions in Travel Insurance

Following are the things that are commonly not covered under travel insurance.

  • When travelling against doctor’s advice

  • Luggage delay (less than 24 hours)

  • Medical expenses due to self-inflicting injuries during the trip

  • War or riots when in foreign lands

  • Participation in dangerous sports such as bungee jumping

  • You can get in touch with your travel insurance provider to resolve any doubts you may have before buying the policy.

4. Home Insurance

Home insurance is a policy that financially protects your house against damages/loss due to natural and man-made calamities, fire, or burglary. The cover is also extended to the valuable items inside your home. A few types of home insurance plans available on Finserv MARKETS are as follows:

  • Home building (structure): Provides financial protection to your home/property.

  • Household articles (content): Provides financial protection to valuables inside your house.

  • Home building (structure) & Household articles: Provides financial protection to both your house and the valuables inside it.

Besides, you can use the home insurance calculator to determine the premium rate of your desired coverage. You can read about the home insurance exclusions by visiting Finserv MARKETS.

Buy Insurance Online at Finserv MARKETS

The process of purchasing an insurance plan with us at Finserv MARKETS is simple. Just follow the steps below:

  • Know the type of insurance you are looking to buy

Based on your insurance-related requirements, understand the type of insurance plans you may need. Conduct intensive market research on the same and gather all the information that you will need before finalising the policy. An extensive assessment, in terms of insurance, will allow you to evaluate the coverage needed and help make an informed decision,

  • Check the options available

With different types of insurance plans, you will come across various policies under each of them. Compare the benefits offered along with their add-on covers before making the purchase. Understand the policy terms and conditions, claim process, and additional services.

Use the calculator tools wherever available to know the policy cost based on your desired coverage and add-ons. This will take you a step closer to choosing the right insurance plan for yours, your family’s, and your property’s future security.

  • Pick your plans and proceed to apply

Once you have decided the insurance plans you need to buy, all you have to do is fill out the application form online at Finserv MARKETS. Enter your personal and other requested details correctly. Then proceed to upload the necessary documents and submit the application. The insurer will assess your application request and verify the documents before approving anything.

  • Pay the premium online

Once your application is approved, pay the policy premium online. The process is 100% safe and secure. In case you are facing difficulties in the payment process, reach out to an executive at Finserv MARKETS and get it resolved immediately. Once the premium payment is successful, the insurance policy will be issued shortly.

Besides buying insurance via the website, you can also buy policies using the Finserv MARKETS app. Simply download the app from the Google PlayStore or Apple AppStore and proceed with the application.

Factors That Affect The Insurance Cost

The premium amount of your insurance policy depends on certain factors. The following table shows the factors that hold significance when determining the cost of different policies in India.

Insurance Policy

Factors Affecting the Premium Price

Life Insurance

  • Your age

  • Medical conditions

  • Profession

  • Type of policy

  • Lifestyle habits

  • Sum assured amount

Motor Insurance

  • Make and model of the vehicle

  • Type of coverage

  • Add-on covers (if any)

  • Age of the vehicle (at the time of renewal or buying insurance for a second-hand vehicle)

  • Driving history

  • Insurance claim history

Health Insurance

  • Yours and your family’s medical history

  • Sum insured amount

  • Type of health plan and add-on benefits

  • Your age and gender

Travel Insurance

  • Type of coverage

  • Sum assured amount

  • Your age

  • Your health

  • The place you’re travelling

Home Insurance

  • The size of the house

  • Type of home insurance coverage

  • Age of your home and technology installed inside it

  • Area of residency

  • Sum assured amount

Conclusion

Before buying any type of insurance in India, it is best to be well versed with its features, benefits, coverage, limitations, cost, and more. Additionally, the insurer you choose to purchase the policy should be reliable and trustworthy. Their claim settlement process needs to be easy and swift.

You can browse the different insurance plans available on Finserv MARKETS. We provide detailed information on the products offered on our platform. So, based on your affordability, convenience, and need, proceed to buy the best-in-class insurance plan at Finserv MARKETS online.

FAQs on Types of Insurance Plans in India

  • ✔️What types of general insurance are available on Finserv MARKETS?

    We’ve got the following types of general insurance plans on our platform:

    1. Health Insurance

    2. Motor Insurance

    3. Travel Insurance

    4. Home Insurance

    5. Cyber Insurance

  • ✔️How do I raise a claim on my insurance policy bought from Finserv MARKETS?

    You can raise a claim on your insurance plan by visiting the specific section on Finserv MARKETS website. Fill out the claim application form, upload the supporting documents, and submit the same. The respective insurer will assess your claim application and approve/reject it.

  • ✔️How do I know if my insurer is a reliable entity or not?

    The reliability of the insurer can be judged based on their claim settlement ratio. Insurance Regulatory and Development Authority of India (IRDAI) publishes the CSR of every insurer in India on its website every year.

  • ✔️What are the types of life insurance plans available on Finserv MARKETS?

    We’ve got the following types of life insurance products on our platform:

    1. Term insurance

    2. Whole life insurance

    3. Endowment plan

    4. ULIPs

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