Insurance is a legal agreement between the insurer and the insured (policyholder). The insurer makes a promise to pay up for the losses, if the insured contingency takes place. The contingency is any event which causes a loss.
This could be the death of the policyholder within the term of the plan, damage or even destruction of the property. Even an unexpected hospitalization is covered. Contingency means uncertainty vis-à-vis the happening of the event. The policy holder pays a premium to the insurer in return for this promise.
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Discussed below are some of the insurance policies that are a must-have for all citizens of India:
1. Health Insurance: With the rising cost of medical treatment and healthcare, a health insurance policy is a must. Availing a health insurance policy is a smart financial decision, as the premiums are low, but the policy coverage is high.
A small accident leading to hospitalization or an emergency hospitalization, may lead to your finances getting derailed. Think of the repercussions in case of a critical illness or a major health issue. A good health insurance policy helps the insured avail quality healthcare at top hospitals which is otherwise unaffordable.
Keep a check on the factors like insurance premiums, age, inclusions and exclusions, co-pay, network hospitals included while buying a health insurance policy. Try to avail a health insurance policy in your 30's as people are healthier in younger years and the percentage of any genetic or chronic diseases is low at this age.
2. Term Insurance: Term insurance is a must-have for all people in India who have dependents. Term insurance ensures financial safety to your family for an affordable premium. Term insurance policy offers a financial cushion in case of the untimely demise of the breadwinner of the family within the term of the plan. Term insurance covers death in an accident as well as natural death. There are no survival benefits.
While purchasing a term insurance plan do consider the following factors:
3. Home Insurance: A house is a valuable asset and an expensive investment a person makes in his lifetime. Sometimes, people invest a considerable amount of money on a house, like the entire retirement corpus. However, there is no shield to protect your home from natural calamities like an earthquake, floods or a storm.
A home insurance policy can prove to be your saviour in such situations. A home insurance policy protects against financial loss due to natural calamities that may permanently damage the structure of your house. By availing home insurance, you can shield your home against fire, theft and natural calamities leading to minor or extensive damage to the structure of your home.
A Householders Package Plan is a comprehensive insurance plan, which not only covers the structure of your house, but also covers the contents of the house. A policyholder can avail additional protection through riders. For example, a person living near the sea coast or a river can avail a rider to cover damage caused due to floods, which is otherwise not included in the policy.
4. Car Insurance: Car insurance Plan is a must-have for car owners in India. According to motor vehicles act 1988, it is mandatory for car owners to have a third-party insurance cover for vehicles driven on public roads. Avail a comprehensive car insurance plan which not only covers third-party liability, but also own damage. (Damage suffered by your car in a collision). Avail car insurance for:
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