WHAT IS INSURANCE ?

Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss during specific time period agreed . It is an expense required to protect future and have peace of mind today . It is a risk management device used as a part of prudent financial planning , investment vehicle and tax saver .

An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. The transaction involves the insurer paying or agreeing to pay premium at the agreed interval to the insurer in exchange for the insurer's promise to compensate the insured an amount agreed up on or to make good the loss fully or partially in the case of a financial loss. The insured receives insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The insurance policies are issued for specific time periods during which period only risks are covered . Policies will have an option to renew them on maturity on payment of fresh premium . There are various insurance companies specializing in particular types of risk coverage . In India , insurance companies are regulated by Insurance Regulatory and Development Authority of India ( Website https://www.irda.gov.in/ ) .

WHAT ARE BENEFITS OF INSURANCE ?

Insurance provides peace of mind by taking care of the contingent risks associated ownership or activity . Additionally, in some cases, people or businesses are required to have certain types of insurance in order to protect others. An insurance policy pays you or the designated recipient when a covered loss is realized.

WHAT ARE MAJOR TYPES OF INSURANCE ?

There are separate types of policies available for each type or group of risks . Some of the popular types of policies are :
​ 1. LIFE INSURANCE 2. HEALTH INSURANCE 3. VEHICLE INSURANCE 4. FIRE INSURANCE

Other types of insurance are Travel insurance , House Holder's policy , Project insurance

BASICS OF INSURANCE

LIFE INSURANCE

Life insurance provides a monetary benefit to a nominee or legal heirs in case of death of policy holder during the period of policy . Though it is called Life Insurance , it actually covers financial loss of the family on the death of its breadwinner who is insured . The premium for an insured amount primarily depends up on the age of policy holder at the time of taking up the insurer . There are policies which pay an assured maturity amount at the end of the policy period or in between at specific intervals to the policy holder if death does not take place during the period . To encourage people to take insurance policies , Government of India allows certain benefits to the policy holders in form income tax exemption . In India , there are both public sector and private sector life insurers . As life insurer covers the risks for a long period , one has to be diligent about the h Often policies also cover Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.

For further details , visit page LIFE INSURANCE

HEALTH INSURANCE

Health insurance policies cover medical expenses in general and hospitalization in particular . Insurance policies may cover certain percentage of actual expenses or a fixed amount agreed on onset of a particular disease or hospitalization . Premiums are collected annually or in regular intervals . Some insurers will pay directly to the hospitals under the policies promising “ Cashless “ cover and hence it is suffice for the insured to show the insurance card issued by the insurer for getting treatment .

Premium paid under health insurance are tax exempted under section 80D of Income Tax act of India .

For further details visit page HEALTH INSURANCE

HOUSEHOLDERS’ POLICY

Householders policies generally cover both the houses you own and contents in the house as well as accidents that may take place . The risks covered generally are theft , burglary , damages caused to house and its content for many reasons like fire n accidents etc .

VEHICLE INSURANCE

Vehicle insurance or Motor insurance covers the insured against damage to the vehicle insured and pays for third party liability determined by courts against the insured as owner of the vehicle . The third party insurance is a must as per law .

For details visit page VEHICLE INSURANCE

TRAVEL INSURANCE

Travel insurance policies cover risks involved while travelling . Bormal policies cover the travel within the country and special policies are to be obtained for overseas travel . these policies are useful especially for those who travel often . Individual policies can also be obtained for a single specific overseas travel . Normally policies cover accidents during travel , medical emergencies while travel , baggage theft , loss of passport , purse etc or delays in air travel .

GENERAL TIPS FOR MANAGING INSURANCE

Insurance is a necessary expenditure . It gives you peace of mind. Hence insure all the risks you anticipate in your life.

Correctly assess the replacement value of the risks you fear and insure for full amount .

Do not over insure or under insure the value . If you over insure , you will get what is actual value of loss less reductions mentioned in the policy and you would have paid extra premium . . If you under insure , there will be substantial reduction on your claim .

Give factual position of your self and properties to be insured . Any wrong information may cause delay and dishonor of your claim .

Check the credentials of the insurance agent before you entertain him / her . Insurance agents may mis- sell policies and beware of the fact they work for a commission . Hence there may be a tendency to rush you to a particular policy or company . Take your time to decide.

First decide what is your requirement of insurance . Discuss with the insurance agent you trust . Go on line and find products suited for you from various companies. View the reputation of insurance company in settling the claims . Get quotes from the companies from whom you are ready to buy . Compare the premiums , terms and conditions . Finally you decide .

There are portals available for exclusively comparing insurance products . Utilise them . But remember they may compare only few products from few companies . Hence you may visit various portals of insurance companies themselves for wider choice . Even if you are dealing with your insurance agent direct , information you gather on line will help you to get reduction of premium from the agent .

Time spent on understanding insurance policies you want to buy is worth it as you are buying peace of mind for a long time .

Dairaise the Due dates and pay before the date to avoid penalties / risks . You can give instruction to your banker to make payment before due date or you can give mandate to insurance company to make ECS Claim .

FREE LOOK PERIOD :

Dated 06.09.2024 : If you purchase an insurance policy, either life insurance or health insurance, and the policy covers one year or more , you are entitled to return the policy if you are not satisfied with the terms and conditions of the policy.

Many times insurance companies or their representatives would have made tall claims while selling an insurance policy and perusal of the policy gives a different picture. But now you can go through the policy and ask for the cancellation of the policy and a refund of the premium paid within 30 days of the issue .

As per the Master circular issued by IRDAI on the protection of policyholders interest 2024 , policy buyers are entitled as follows :

Free Look Period:

i. From the date of receipt of the life insurance policy having policy term of one year or more, a policyholder will have 30 days called as MFree Look period" for reviewing the terms and conditions of the policy.

ii. In case the policyholder Is not satisfied with policy terms or conditions, he/ she has the option to return the policy within this 30 days period to the insurer for cancellation.

iii. Irrespective of the reasons mentioned, insurer must accept the request of the policyholder to exercise the option of free look cancellation.

iv. The policyholder shall be entitled to a refund of the premium paid subject only to a deduction of a proportionate risk premium for the period of cover and the expenses, if any, incurred by the insurer on medical examination of the proposer and stamp duty charges.

v. In respect of a linked insurance product, subject to deductions mentioned under para (iv) above, the Insurer shall refund the proceeds by repurchase of the units at the Net Asset Value (NAV) of the units on the date of cancellation.

vi. The applicable refund of premium upon free look cancellation shall be refunded within 7 days of receipt of request for free look cancellation. In case of any delay in refund, the insurer shall:

a) refund such amounts along with interest at the bank rate plus 2 percent on the refundable amount, from the date of receipt of the request for free look cancellation till the date of refund. This penal interest is without p rejudice to any other penalty that may be levied by the Authority for non-compliance.

b) Such interest shall be paid suo-moto by the insurer.

To go through the Master circular on protection of policyholders' s interest 2024 , CLICK HERE

Get information on Unclaimed amounts with insurance companies :

Dated 22.08.2024 : Do you want to have information on matured insurance policies on which you have not made any claim . Now Policyholder can access information on unclaimed amounts with any insurer in one place.

IRDAI has established Integrated Grievances Management System (Bima Bharosa) in the year 2010 through which IRDAI monitors disposal of Policyholder Grievances across the industry. Policyholder can also complaint online through Bima Bharosa and view the status of his/her complaint online. Now the website of Bima Bharosa has link to all insurance companies webpages where you can have details of unclaimed amount lying with them .

A link is provided on Bima Bharosa . and you can go to the link and click on the name of the insurance company .

You are now taken the insurance company's website where you can feed your personal details like name , date of birth , e-mail address , mobile number and policy number if you remember . You can get the present position of the policy and take up with the insurance for transferring the unclaimed account to your bank account