Insurance is an arrangement in which an insurer provides cover against any kind of damage or death, to the insured. In this arrangement, the insured is supposed to pay some amount regularly known as the premiums.
Insurance in general can be of many types like given below:
1. Auto insurance
- Auto insurance means insurance related to the vehicle that a person owns. It provides cover against financial loss in any mishappening involving the vehicle like the damage to the vehicle, third party liability and medical expenses in case of injury.
- In India, it is compulsory to have a motor insurance. Going out in public in a vehicle without an insurance is a punishable offense.
- It can be of following types:
- Car insurance
- Two wheeler insurance
- Commercial vehicle insurance
2. Health insurance
- Living in a polluted environment increases the risk of falling sick regularly or having a critical illness and the cost of treatment of almost any kind of critical illness is very high nowadays. It is difficult for everyone to be ready financially for such sudden medical expenses. In such a situation, having a health insurance can definitely reduce your financial burden.
- A health insurance can be defined as a type of insurance which assists the insured in case of medical emergencies. It covers the expenses that the insured individual incurs in case of hospitalisation, for buying medications or in case of any surgical expenses.
- It can be of following types:
- Individual policy
- Family policy
- Surgery cover
- Comprehensive health cover
3. Travel insurance
- While going for a national or international trip, a person may face situations like loss of baggage, loss of passport, sudden cancellation of the trip etc. In such cases insuring oneself with a travel insurance can reduce the financial burden of the insured.
- Travel insurance can be defined as the insurance designed for people who travel a lot or travel internationally. A travel insurance can help in meeting the unforeseen expenses on a trip like medical expenses or other financial losses that you might face while travelling.
- It covers expenses against:
- Trip cancellation
- Trip interruption
- Medical emergencies
- Loss of baggage
- Accidental death
- Repatriation of remains
4. Home insurance
- Nowadays almost everybody wants to own a home and they work very hard to get one, but it is also important that they take good care of it and maintain it properly. A home insurance can be very helpful in critical situations such as damage to one’s home due to natural calamities like earthquakes or human created calamities like riots etc.
- Home insurance, also known as homeowner insurance, provides coverage against any damage that happens to your house or the things present in the house due to any disasters or accidents like burglary or thefts. It also provides liability coverage against accidents in the home or on the property.
- In covers against damage to your house or its contents, third party liability (if someone gets hurt or dies in your house) etc.
5. Cargo insurance
- A business may involve transporting of goods to other places and that involves a lot of risk, for example, the cargo might be lost somewhere or stolen or damaged due to some reason. In such cases a businessman incurs a great loss and to protect himself from such losses he might buy a cargo insurance.
- Cargo insurance is a policy which covers damage or loss of the cargo transported via land, air or sea. The cargo is protected from the time it leaves the seller’s place to the time it reaches buyer’s place.
6. Rural insurance
Rural insurance provides cover to rural or agricultural based businesses like cattle insurance, poultry insurance, hut insurance, agricultural insurance etc.
7. Life insurance
- After someone’s death, it is very difficult for his/her family members to handle themselves emotionally and also financially. Having a life insurance doesn’t bring back the dead person, but it can reduce financial burden on the family members of the dead.
- Life insurance can be seen as a contract between the insurer(policy company) and the insured(policy holder) in which the insurer promises to pay a fixed sum of money to the beneficiary(decided by the insured) after the demise of the insured.
8. Other insurance Policies
Other Insurance Policies include property insurance, personal accident insurance, shopkeeper insurance,corporate insurance, commercial insurance, fire insurance etc.