Insurance plays a crucial role in safeguarding individuals and businesses from financial risks. In India, the insurance industry has witnessed significant growth in recent years, offering a wide range of products to cater to diverse needs. But in order to make informed decisions and maximize the benefits of insurance, it’s essential to have a solid understanding of the key aspects. In this article, we will explore five important things one must know about insurance in India, backed by the latest statistics.

As per a data survey by the Invest India,

“India’s insurance premium volume stands at $ 127 Bn as of 2021 (Life – 76%, Non-Life – 24%). Total insurance premium in India increased by 13.5% in 2021 as against a global average of 9%.

  • In terms of total premium volumes, it is 10th largest market globally and the 2nd largest of all emerging markets, with an estimated market share of 1.9%. It is expected that premiums will grow by an average 9% p.a. (in real terms) over the next decade. India is poised to emerge as one of the fastest-growing insurance markets in the coming decade.
  • India has 67 insurers of which 24 are life insurers, 26 are general insurers, 5 are stand-alone health insurers, and 12 are re-insurers (March 2022).
  • The insurance industry in India has witnessed an impressive growth rate over the last two decades driven by the greater private sector participation and an improvement in distribution capabilities, along with substantial improvements in operational efficiencies.

BUT WHAT’S IN IT FOR US ?

Good question ! But before answering that, we must first know what are all the different types of benefits we can get through this tool, especially in a country like India where healthcare costs are rising quite apprehensively every year and the life expectancy of any citizen can’t be said with a guarantee at all.

Types of Insurances : –

Life Insurance

Almost everyone has heard the name – ‘Life Insurance Corporation of India’ or LIC – and thus it becomes necessary to tell that life is one of the most common and essential forms of insurance in India. It offers financial protection to beneficiaries in the event of the policyholder’s demise. Life insurance policies can be categorized into term insurance, whole life insurance, endowment plans, and unit-linked insurance plans (ULIPs). Term insurance provides coverage for a specified term (20/30 years), while whole life policies offers coverage until the policyholder’s demise. Endowment plans combine insurance coverage with savings, and ULIPs offer a combination of life insurance and investment opportunities.

Hands cut out protecting an family saying that how life insurance and other insurances protect us and our families as a whole
Hands with cut out paper silhouette on table. Family care concept.

Who Should Do This – Secret Trivia : – Anyone living under the sun should have a term insurance policy, if not any endowment plans because the latter only operates on a money back guarantee scheme and the majority of its profits goes to the agent themselves. For example, supposedly a term insurance of Rs 50 Lakhs for a 30 year old non-smoker guy comes to around Rs 12000 per year (approximately), whereas an endowment plan or an ULIP promising the same amount of life coverage will cost more than Rs 25,000/-, that is, almost if not more, than double. So, it is advisable to invest only the necessary amount for insurance and the rest in Mutual Funds if all we want is a steady growth on our money – there is no point making our agents richer than they already are!

Health Insurance

With rising healthcare costs, health insurance has gained significant prominence in India. Health insurance policies provide coverage for medical expenses incurred due to illnesses, accidents, or hospitalization. They offer benefits such as cashless hospitalization, reimbursement of medical expenses, and coverage for pre-existing conditions in lieu of a cooling period for the first three years. Health insurance can be purchased individually or as part of a group policy provided by employers. Critical illness insurance, maternity insurance, and personal accident insurance are additional specialized health insurance options that are available in the market.

a stethoscope surrounding a family saying how health insurance protects us from adversities
Health Insurance Concept With Family And Stethoscope On Wooden Desk
House Home” by Binyamin Mellish/ CC0 1.0

Motor Insurance

Motor insurance is mandatory in India for all vehicles plying on public roads. It provides financial protection against damages caused to one’s own vehicle (own damage) as well as third-party liability arising from accidents. Motor insurance policies can be broadly classified into two categories: third-party liability insurance and comprehensive insurance. Third-party liability insurance covers damages caused to a third party, whereas comprehensive insurance covers both third-party liability and damages to one’s own vehicle.

Who Should Do This – Secret Trivia – You know this – if you have a two-wheeler or a four-wheeler friend in your family, you may not protect it like your protect yourself with health insurance, you must ensure to wrap its soul with adequate cover, otherwise you will face insufferable consequences in the future.

A car has broken glass claiming motor insurance
Car accident, insurance, photo“/ CC0 1.0

Home Insurance

You own a home, you should insure it. Period. Home insurance safeguards individuals’ and businesses’ properties against various risks, including fire, natural calamities, theft, and damage caused by accidents ; Including the structure of the properties , home policies cover its contents as well. They provide financial compensation for repair or replacement costs in the event of covered perils. Home insurance can be customized based on the type of property, its location, and the coverage requirements of the policyholder.

the picture of a well decorated house being adequately insured by home insurance thus saying the benefits of health insurance

Travel Insurance

Travel insurance offers coverage against unforeseen incidents that may occur while traveling domestically or internationally. It provides protection against trip cancellations, medical emergencies, baggage loss, flight delays, and other travel-related contingencies. Travel insurance policies can be tailored to suit specific travel durations and destinations, offering peace of mind and financial assistance in case of emergencies.

Aero plane flying in the sky being insured fully for travel insurance thus defining the importance of travel insurance
Aeroplane in the sky“/ CC0 1.0

For International Travel Insurance, click on the hyperlinks – Care , TATA AIG, Policybazaar etc.

Business Insurance

Business insurance, also known as commercial insurance, is designed to protect businesses from various risks. It includes coverage for property damage, business interruption, liability, professional indemnity, cyber risks, and employee-related risks. Business policies are customized based on the nature of the business, industry, and specific risk exposures.

four persons discussing the probabilites of a business thus proving the importance of having adequate business insurance for a company

Summary

Insurance plays a crucial role in mitigating risks and ensuring financial stability in India. The types provided, including life, health, motor, home, travel, and business insurance, cater to diverse needs and offer comprehensive coverage. Understanding the different types of insurances available empowers individuals and businesses to make informed decisions and secure their financial well-being. By carefully assessing their requirements and consulting with insurance professionals, individuals can choose the appropriate insurance policies to protect themselves, their loved ones, and their assets in the face of uncertain events.

For more informative content, follow our social media channels and keep on following our website for more amazing details to make informed decision about your future and travel on a path to financial freedom very early in life.

That’s it folks! See you soon! Until then, keep on FinancenFuturing!

Business Working” by Marc Chouinard/ CC0 1.0

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