Having financial security to protect yourself from unexpected circumstances is always necessary. A road accident, an unfortunate medical emergency, or a last-minute cancellation of travel plans can lead to severe financial losses. In such scenarios, having an insurance policy can support you and your loved ones.
What is the Importance of Insurance in One’s Life?
Here are some benefits of having an insurance policy:
- Protecting your hard-earned money and assets.
- Maintain your standard of living despite a tragedy.
- Specific insurance policies offer tax-saving benefits.
- Benefits for your children, including higher education and marriage
- Helps you build a retirement corpus
5 Types of Insurance Policies Everyone Should Have
Discussed below are the 5 key insurance policies that you must buy:
1. Life Insurance
Life insurance is especially important for those individuals who are the sole breadwinners of their families. In a situation of the policyholder’s untimely demise, the secured amount will be given to the nominee/s. Life insurance should be prioritised, especially if you feel that your near and dear ones will face financial hardship after your demise.
Types of Life Insurance Plans for Different Needs
- Term insurance plan
- ULIPs (Unit Linked Insurance Plans)
- Money-back insurance plans
- Whole life insurance plans
- Endowment insurance plans
- Child money-back insurance plans
- Group insurance plans
- Retirement plans
- Pension plans
2. Home Insurance
The future is unpredictable, and an unfortunate situation like a fire or natural disaster can lead to unpleasant consequences. Home insurance covers the replacement of the whole property and living costs for your temporary home until things are restored to normalcy. Additionally, you get cover for any precious lost items like jewellery.
Types of Home Insurance Policies for Different Needs
- Home structure insurance
- Fire and Special Perils Policy
- Liability insurance
- Theft insurance
- Burglary insurance
- Jewellery Insurance
3. Motor Insurance
Motor insurance is mandatory under Indian law. Being involved in an accident could result in a partial or total disability for you as well as financial losses. However, whether you have a car, two-wheeler, or a commercial vehicle, an insurance policy guarantees you receive compensation for damages incurred.
Further, this insurance covers your vehicle if it has suffered damages due to thefts, riots, and even natural disasters like earthquakes.
Motor Insurance can be segmented into three main categories:
- Car Insurance: Your four-wheeler is protected from any damages incurred.
- Bike Insurance: Your motorbike or scooter is insured from any accidents.
- Commercial Vehicle Insurance: Vehicles like trucks, tractors, transit mixers and taxis are protected from damage to the vehicle and any third-party liabilities.
Types of Motor Insurance Plans for Different Needs
- Third-party liability insurance
- Own damage insurance
- Comprehensive insurance
4. Health Insurance
Private healthcare offers the best treatment to ensure your well-being, but the expenses incurred for hospitalisations, medications, follow-ups and more can cause financial concerns. With soaring medical costs, a health insurance policy is now more critical than ever.
Additionally, if you develop a rare disease that is harder to cure, your medical bills can be costlier than expected. A health insurance policy can help in such a situation.
Types of Health Insurance Policies for Different Needs
- Senior citizens’ health plan
- Individual health plan
- Group health plan
- Critical insurance plan
- Family floater health plan
- Personal accident plan
- Maternity plan
5. Travel Insurance
Whether a domestic trip to your favourite city or a long-awaited international trip, travel insurance is necessary for financial safety. If you’ve lost luggage or had to cancel a trip due to an unfortunate demise like a death or an accident, travel insurance can help you stay stress-free.
Types of Travel Insurance Policies for Different Needs
- Domestic travel insurance
- International travel insurance
- Single trip plan
- Multi-trip plan
- Group travel plan
- Senior citizen travel plan
- Family travel plan
- Student travel plan
If you want to guarantee financial security and protect your family’s future from unpredictable situations, enrol in the insurance policies mentioned here as soon as possible. Additionally, please consider other coverage plans like budget health insurance policies, cashless claim settlement coverage for vehicles, and long-term insurance for senior individuals so that your policies perfectly fit your requirements.
Frequently Asked Questions
1) Is car insurance compulsory in India?
The different types of insurance policies in India vary according to the rules. According to the laws, car owners must have at least third-party liability insurance.
2) Which is better — life insurance or term insurance?
Term insurance offers only death benefits but at lower costs. However, life insurance plans provide life-term coverage with flexible income payout and premium payment plans, albeit at a higher premium cost.
3) At what age should you opt for health insurance?
Ideally, you should opt for health insurance when you turn 18.
4) How much coverage should you target for health insurance?
Your health insurance coverage should ideally be around 50% of your annual income.
5) What are the benefits of unit-linked insurance plans?
With ULIPs, you receive tax-saving benefits, the option for partial withdrawals after a 5-year lock-in period, and the flexibility to change your fund and premium amount.
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