Have you ever been in Love? It's an amazing feeling to find someone you can trust, who makes you feel secured, revive all your stress and brings a smile on your face 😍 Your life changes when this person becomes your partner for life. Similar is the role of insurance in our lives.
What is Insurance?
Insurance is a means of protection against any kind of risk or loss. It is a shield against any financial loss due to unforeseen circumstances in daily events of life.
A survey, carried out by Cigna TTK Health Insurance said about 89% of the population in India said they were suffering from stress compared to the global average of 86%
The main reason of stress these days is a financial stress. This is unending stress, life can be stressful even if have more or less money. So, how can you be Stressfree and Happy 😃 A simple solution is the perfect combination of Investment + Spirituality + Insurance. So, before we understand the need for insurance, let us understand its types.
Type of Insurance
In India, Insurance is broadly divided into three categories.
1. Life insuranceLife insurance is insurance on your life. It should be mainly purchased by a bread earner in the family or by a family member who mainly contributes to family expenses. Under life insurance, the policyholder’s family is financially compensated in the event of the untimely demise of the policyholder during the term of the policy. It is usually recommended to purchase life insurance/term insurance at a young age to lock-in the premium amount. You can avail tax benefit up to 1.5 lacs under IT Sec 80C.
2. Health insuranceHealth insurance is insurance to cover your medical costs for expensive treatments. There are various types of health insurance policies based on diseases and ailments you want to cover. You can buy a generic health insurance policy as well as policies for specific diseases. The premium paid towards a health insurance policy usually covers treatment, hospitalization and medication costs. You can avail tax benefit up to 1 lacs under IT Sec 80D, based on your policy and family members covered in the policy.
3. General insuranceGeneral insurance is a non-life insurance policy. Popular general insurance policies are:
a. Auto Insurance / Vehicle Insurance / Car insurance
Auto insurance is an important policy for every vehicle owner. This insurance protects you against any unprecedented incidents like accidents. Some policies addons also compensate for damages to your car during natural calamities like floods or earthquakes. It also covers third-party liability where you have to pay damages to other vehicle owners. Prefer buying a zero depreciation policy.
b. Home Loan Insurance: Most people cannot effort their dream house and end up taking the Home loan. Home Loan insurance is unique insurance linked to your home loan. It helps you avoid passing your liabilities to your loved one. Imagine your family in set back of your loss and suddenly your liability tops it up. So I personally would recommend you buying this insurance policy.
Conclusion
Above discussed insurance (life insurance, health insurance, and general insurance) are a few critical insurances and must be part of your financial planning at all level. You should only drop them, in case the financial impact of this risk is insignificant. If you still have any queries, drop a comment below.
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