What is insurance and what are the types of insurance ?

Do you know what is insurance ? Why all of us are required to insure our life or our property, how many types of insurance or insurance are there. If you also have some doubts about insurance or insurance, then you must read this post till the end because today we will know about all aspects of insurance.

As we all know that the life and property of any human being is surrounded by both death, disability and waste. Nobody knows what is going to happen to them the next moment. At the same time, such accidents can lead to huge financial losses . At the same time, insurance is a very good way to protect yourself from such a situation by which these risks can be overcome to a great extent.

What is insurance
What is insurance

At the same time, the entire responsibility of these risks is handled by the insurance company through these insurance schemes. Insurance saves us from many risks such as house fire, car accident, house theft. While there are some types of insurance that also provide money for the treatment of your illness, at the time of your death, you also offer this insurance amount to your family.

Valid if you Insurance What happens to know more about when you’re reading the whole way this article insurance is what happens. With which you will get complete information about it. Then let’s start without delay.

What is insurance?

Insurance is a kind of legal agreement between two parties which is the insurance company (who gives insurance or insurer) and the second is the person (who takes insurance or insured).

In this, the insurance company promises that if something untoward or unforeseen event happens, then the company is the one to take the responsibility of everything. At the same time all the things that have been damaged will be completed by the company itself.

These types of incidents are called contingencies because there is no cure for these events when they are going to happen. In this the insurance company has to compensate for all the losses as they had promised earlier.

Principles of Insurance – Principles of Insurance

When you buy an insurance from the insurance company then the insurer (which is the company) and insured (which is you) gets a legal contract of insurance, it is called insurance policy.

This insurance policy contains all the details about which you should know, such as all the conditions and circumstances under which the insurance company is going to pay you your insurance amount, if there is any loss then, if you do not then you have selected Gone nominee.

1. Life Insurance – Life Insurance

As the name suggests, your life is insured in life insurance. You buy life insurance so that even if you are not there, your family is not dependent on anyone and themselves are financially secured.

Life insurance becomes very important for those people when you are the only one earning in your family and the whole family depends on you.

2. Health Insurance – Health Insurance

Health insurance is taken to cover the expenses of medical treatments. There are also many types of health insurance policies that cover different diseases and ailments.
You can also take a generic health insurance policy or you can also take a specific policy for a disease. The premium pay that is made in it covers all types of treatment, hospitalization and medication costs.

3. Car Insurance – Car Insurance

In the same way, you can insured your car with Car Insurance . If any accident is to happen then you get its compensation.

4. Education Insurance – Education Insurance

In this insurance, you are depositing money for the correct education of your child and when that time comes, you get a lumpsum amount for the education of your child.

5. Home Insurance – Home Insurance

If you have built your house, then you must buy home insurance because if it causes any damage to your home, whether it is fire, natural disaster or anything else, you get your compensation in everything. .

Do you also get tax benefits from taking insurance?

There are other benefits of taking insurance, except safety, security benefits. You also get tax benefits from this.

1. Life insurance premium up to ₹ 1.5 lakh can also be claimed under a tax-saving deduction under section 80C

2. Medical insurance premium up to ₹ 25,000 for yourself and for your family, while ₹ 25,000 for your parents, you can claim under a tax-saving deduction under Section 80D

You have to make these claims at the time of filing e-filing income tax returns.

How is Insurance Claim done?

Let us now know how you can claim your insurance amount.

1. For this you must first make a claim against your insurance policy.

2. Now you have to provide all the details regarding your loss that you have suffered. It differs from insurance to insurance.

3. Then you have to submit all the bills / proof of your damage, loss, hospitalisation , etc.

4. Now your work ends here, now the insurance company will verify your claim.

5. If your claim is proved correct then you get your claimed amount, according to your loss.

Insurance functions

Insurance has evolve at the cost of a process that protects people’s loss and uncertainty. It is described on the basis of a social device in reducing the loss of life and property.

Insurance promotes general economic growth in the society so that the process of the society can run properly with stability. Insurance industries develop financial institutions that later help to reduce uncertainties and risks.

1. Provide Safety and Security

Insurance provides financial support and along with it also reduces uncertainties in business and human life. It provides safety and security against any particular event.
Since there is always the fear of sudden loss, insurance has a big hand in reducing it.

2. Generates financial resources

Insurance generates funds by collecting premium. These funds are invested in government securities and stocks . These funds are used in the industrial development of the country so that the economic development of the country can be done. Employment opportunities also get a boost.

3. Life insurance promotes savings

Insurance not only protects you from risks and uncertainties, but it also provides an investment channel. Life insurance enables us to make systematic savings on the basis of filling the regular premium. Life insurance also provides an investment mode.
It creates a habit of saving money in us. The lumpsum amount of premium is what we get at the end of the matured amount at the time of maturity. Therefore insurance encourages you to make savings.

Definition of insurance

4. Promote economic growth:
Insurance generates significant impact on our economy by mobilizing domestic savings.
Insurance provides this accumulated capital as productive investments. Insurance enables it to mitigate loss, promotes financial stability and promotes trade, as well as promotes trade and commerce activities thereby ultimately providing economic growth and development. Therefore, insurance plays an important role in the sustainable growth of the economy.

5. Medical support:
Medical insurance is considered very important to manage the risk of heath. Because any of us can fall ill at any time, which can cost a lot. On the other hand, if you have medical insurance, then it covers your big expenses which can help you a lot in such situations.

6. Spreading the
risk : Insurance helps in spreading our risk. With which it protects us from large losses.

7. Funds Collect is a great source:
Large funds can be easily collected by premium. These funds can be used in the development of the country, which leads to the economic growth of the country.

Benefits of insurance

By the way, insurance provides immense benefits to any individual, family businessman, businesses as well as society. Let us know about some of its important advantages: –

1. Insurance provides economic and financial protection, insured person or thing that has been insured, that too in a nominal amount called premium.
At the same time, it provides financial protection to the nominee if a pre-matured death of insured person occurs. Along with this, it also covers many losses such as loss of property due to theft, from a fire or from any natural calamity.

2. At the same time it reduces the risks of people, which otherwise could have caused big losses for them. Although it is not possible to completely remove the risks and uncertainties, but it can be reduced to a great extent. That’s why the insurance company charges you a small premium to earn your risks.

3. It helps in maintaining the standard of living of the people if any such unexpected loss occurs. It also protects us from unfortunate financial crisis .

4. Since we have to pay some premium in insurance, for which it gives us incentive on saving. Due to which saving becomes our habit.

5. It protects us from being dependent on each other. So that you can live your life in your own way and empower us. This life insurance policy gives us full financial support if someone dies.

6. It also provides help in taking loan. If you have a policy going on, then you can take a loan from the insurance company on the basis of that policy. In which this policy is kept according to the collateral.

7. It provides new new employment opportunities for all. In this modern era, hundreds of entrepreneurs and thousands of employees are engaged in this line.

8. Promotes Foreign Trade. Insurance companies have a big hand in promoting international trade of a country. Because the insurance reduces the risks of these businesses, due to which they can do the export activities they want.

9. Insurance companies have a big hand in making businesses operate smoothly. Because it leads to loss of properties. At the same time, the motivation of the employees is increased by the insurance of the employees by the company.

10. It helps in reducing inflation . To reduce inflation, the amount of money has to be reduced. While insurance companies take money from people at a premium, it helps to reduce inflation.

11. These premium amounts are spent in many development areas such as trade and industry. Which leads to economic growth of the country .

Loss of insurance

Know about the disadvantages of insurance.

1. It does not compensate for all types of losses, so that it favors insurance with people, by insurance companies.

2. Financial Compensation takes a lot of time to provide as it has to go through lengthy legal formalities in between.

3. Although insurance encourages savings, but it does not provide the same facilities as that provided by the bank.

4. They intentionally think to compensate the insurer at least so that their profit can be maximized.

5. It also promotes crimes in society, as most beneficiaries want to get insured amount of policy.

6. Sometimes , the total amount of premium is more than the maturity amount.

Insurance

Be it any insurance, life insurance, health insurance or any general insurance, you can buy these insurance policy offline or online . Just like in offline you can buy insurance from insurance agents, similarly nowadays you can buy from many websites online.

The most important thing is that you should do all the research on your behalf before choosing insurance, because after changing insurance later, you may suffer loss.

I hope you have liked this article about what is insurance . It has always been my endeavor to provide complete information about the type of insurance to the readers, so that they do not have to search in the context of that article in any other sites or internet.

This will also save their time and they will also get all the information in one place. If you have any doubts about this article or you want that there should be some improvement in it, then for this you can write down comments.

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