All About Insurance Policy

What Is Insurance?

Insurance is a contract which is presented as a policy to be used as a risk management tool to ensure financial protection at the time of crisis. Insurance helps an individual to ensure financial protection against losses that may arise during an unforeseen event. An insurance policy is a contract between an individual (policyholder) and an insurance company (Insurance provider), under which, the individual makes regular payments known as premiums to the insurance company which in return pays the sum assured in case an unforeseen event such as demise of the policyholder, accident, damage to the vehicles or other possessions.

Why is insurance important?

Unfortunate events like accidents, illnesses, and natural disasters come without any warning and thus it is necessary for you to keep yourself and your loved ones shielded against such unforeseen happenings. One of the best and simplest ways of keeping yourself secured against these contingent events which may cause a financial loss is buying an insurance policy.

How Does Insurance Work?

As mentioned earlier, insurance is a legal contract between the policyholder and the insurance provider. The insurance policy carries all the details about the aspects and conditions under which the insurance provider will pay out the insurance amount to the policyholder or their nominee in case an unforeseen event occurs. Insurance is a financial tool which helps in ensuring financial protection of yourself and your family. Generally the person who has purchased the policy also known as policyholder has to pay premiums for the coverage available under the insurance policy. Any person can seek insurance from an insurance company.

What are the types of insurance available?

IThere are several types of insurance available in India. The four most common types of insurance bought in India are as mentioned below: Motor Insurance: Motor insurance policy is a type of insurance policy that provides financial assistance in the event of an accident or mishap involving your vehicle.

 Motor insurance can be purchased for three categories of vehicles which are personally owned four wheeler, personally owned two wheeler (bikes and scooters) and commercial vehicles. There are three types of motor insurance available in India which are Third party Liability Cover, Comprehensive Cover and Stand Alone Own-Damage cover. According to a person’s coverage requirement for their vehicle, they can choose a motor insurance that fulfills their requirements. 

Third party motor insurance policy is mandatory in India for all vehicles, as per the Motor Vehicles Act. Health Insurance: Health insurance policies provide financial assistance to the policyholder in case they need to be admitted to the hospital for any kind of treatment. 

Additionally, some health insurance plans also cover the cost of treatment which are undertaken at home before the hospitalization or after discharge. There are several health insurance plans available in India such as Individual Health Insurance, Family Floater Plans, Critical Illness Cover, Senior Citizen Health Insurance, Group Health Insurance, Maternity Health Insurance and Personal Accident Insurance. 

Life Insurance: Life insurance is an agreement between an individual and an insurance company under which the insurance company promises to provide a sum assured (death benefit) to the family of the life assured in the event of an unforeseen death of the life assured. 

In case of no death, a sum assured known as the maturity benefit is provided to the life assured at the time of maturity of the policy under selective life insurance plans. There are 6 types of life insurance policies available in India which are Term Life Insurance, Unit-Linked Insurance Plan (ULIPs), Child Protection Plan, Money Back Plans, Retirement Plans and Endowment Plans.

How to make a claim in insurance?

There are two ways in which you can make a claim:

Cashless claims:  Get in touch with your insurer and inform them about your claim. Depending on the type of insurance (motor/health), the insurer will guide you about the cashless claim settlement process. In case of motor insurance, the insurer shares the details of a nearby cashless workshop if available and you just have to pay your part of the liability to get your car/bike repaired. 

In case of health insurance, you can get in touch with your TPA (Third Party Administrator) help desk at the time of hospitalization for a cashless claim.Reimbursement claim:In case of unavailability of a cashless facility, you need to make a reimbursement claim. 

In case of motor insurance, you need to pay the entire claim amount up front (after informing the insurer of the claim) and get it reimbursed from the insurer after the repair of your car/bike. In case of health insurance, you need to pay the entire bill amount to the hospital (after informing the insurer) and get it reimbursed from the insurer post discharge from hospital.

What are the tax benefits on insurance?

Apart from providing coverage from the unforeseen financial losses, insurance policies also lets a person avail income tax benefits. Below mentioned are some tax benefits that one can avail by purchasing an insurance policy under the Income Tax Act: Section 80C: Under Section 80C of the Income Tax Act, premiums paid to purchase life insurance policy qualify for tax exemptions for upto Rs. 1.5 Lakh. 

Section 80D: Under Section 80D of the Income Tax Act, premiums paid towards health insurance policy qualifies for tax exemptions. Section 10(10D): Benefits under life insurance policy that shall be receivable by the life insured or the nominee also qualify for tax exemptions under Section 10(10D) of the Income Tax Act.

 The premium paid for health insurance plans qualify for a tax deduction of up to Rs. 25,000 under Section 80D of the Income Tax Act. These plans also qualify for an additional Rs. 25,000 tax deduction for premium paid for parents’ mediclaim policy (Rs. 50,000 if parents are senior citizens).

What Is InsuranceDekho?

InsuranceDekho is an online platform that lets you compare insurance policies from top-rated insurance companies and purchase the insurance policy that best suits your needs. Buying an insurance policy on InsuranceDekho is very simple. You just need to choose the type of policy you want, fill in the required details, compare various quotes and make payment. And you are done! Your insurance policy is issued.

What kind of insurance policies does InsurancDekho offer?

• InsuranceDekho offers car insurance, bike insurance, health insurance as well as life insurance.
• How long does it take to buy an Insurance Policy on InsuranceDekho?
• Right from entering the details to making payment, the entire insurance issuance process takes just 5 minutes!
• How do I make a payment for policy purchase on InsuranceDekho?
• You can pay using a credit card, debit card, or net banking on InsuranceDekho.
• How do I purchase an insurance policy?
• TO buy any insurance (Car, Bike, Health, and Life), you can reach out to our dedicated support team on 7551196989 Mon to Sun 10 AM to 7 PM.

Key Components of an Insurance Policy

Below mentioned are some components to help you understand what is insurance and how does it work: 

1. Premium Amount: Premium of an insurance policy is the decided amount that you need to pay for the insurance coverage. It is typically known as regular payments which can be made monthly, quarterly, half-yearly or annually. 

There are various factors on which the premium of an insurance policy is calculated by the insurance provider. The idea behind that is to check whether the insured person is eligible for the type of insurance policy they want to purchase. 

2. Policy Limit: Policy limit is defined as the maximum amount that an insurance provider will pay for the losses covered under the insurance policy. This is determined on the basis of policy tenure, loss and similar other factors. 

3. Deductibles: Deductibles under an insurance policy refers to the amount that the policyholder has to pay before the insurance provider settles the claim. Deductibles shall be applicable as per the policy’s terms and conditions.