The Concept of General Insurance
The concept of insurance applies to a large group of people that may suffer the same issue in the same region or condition. The money that is collected as the premium can be considered as a pool and when one encounters some loss, he/she is paid from this pool.
Still, confused about what is a general insurance policy and general insurance meaning? If yes, then go through the following example, suppose your family member suffered a heart attack and he/she requires a transplant on an immediate basis. At the same time, you have to pay the fees of your daughter's first year of college. Now you have huge expenses to meet consecutively and both the issues have the same priority. In this stressful time, the health insurance policy for your family can share your burden and you can pay the fees of your daughter from your savings without any worry. In this way, general insurance in India works as your savior.
The Requirement of General Insurance Policy
Suppose you are driving back home after completing a stressful day at work and suddenly another car hits your car from behind. Your car's bumper comes out and it gets a dent. Now you require approximately Rs.7500 to fix the bumper and Rs.2000 for dent repair. A car insurance plan in such a case plays a key role. The amount that you have paid for repairing your car can be reimbursed under a comprehensive car insurance policy. In this way, a general insurance policy for a car fulfilled your requirement of financial help in case of car damage due to an accident.
Difference between Life Insurance and General Insurance
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Life Insurance
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General Insurance
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Claim Applicability
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Mr. A took a life insurance policy of Rs.1 Crore for which he has to pay Rs.20, 000 annually as premium for 50 years. After giving approximately 10 installments, Mr. A died due to an on-road accident. Mr. A’s family got Rs. 1 Crore. So, the reimbursement in a life insurance plan is made either at the time of death or maturity.
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Mr. A took a Fire Insurance plan for his company. The sum insured for this plan is Rs. 1 Crore and the premium that he has to pay was Rs. 10 lakhs. In case of loss due to fire, the insurance provider will pay the amount of claim after the deductibles (as applicable).
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Functional Period
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Rajat purchased an endowment plan which will pay some amount upon maturity or his family members will get money if he dies. A life insurance plan is issued for the lifetime of the policyholder or until the maturity period.
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Rajat purchased a comprehensive car insurance policy for his car. He purchased this plan on 02. March.2019 and will be expired on 01. March.2020, after a year. So, the general insurance plans are purchased for one year.
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Reimbursement Amount
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Priti chooses to purchase a life insurance plan of Rs.50 lakhs. The total period for which she has to pay the premium was ten years. After completing these 10 years, she received Rs.50 lakhs. In this way, a life insurance plan is an investment plan that pays upon policy maturity.
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Proto got the insurance of her car for Rs.5lakhs. Her car got damaged in an accident and its bumper came off. The bumper repair charges were Rs.15, 000 and her insurance provider will pay off this amount after deducting the deductibles. The general insurance policy work according to the limits and conditions of the policy.
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Insurable interest
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Pankaj has taken a term insurance policy and at the time of the contract, he has to be present. In life insurance, the policyholder who has the insurable interest has to present.
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Pankaj has insured his car with a car insurance policy. However, he sold his car one year later to Ruchi. Ruchi renewed this car insurance policy as the vehicle will be in use. This time the policy was renewed by Ruchi, not Pankaj. So, in general, insurance policy the insurable interest of the insured has to be present while the policy is renewed.
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Types of General Insurance Policies:
Motor insurance is one of those types of general insurance policies that cover all damages and liability to a vehicle against various on-road and off-road emergencies. A comprehensive policy even secures against damage caused by natural and man-made calamities, including acts of terrorism.
Motor insurance offers protection to the vehicle owner against:
- Damage to the vehicle
- It also pays for any third-party liability determined by law against the owner of the vehicle
Motor insurance is mandatory in India as per the Motor Vehicles Act, 1988, and needs to be renewed every year. Driving a motor vehicle without insurance in a public place is a punishable offense.
Third-party insurance is a statutory requirement in our country i.e. the owner of the vehicle is legally liable for any injury or damage caused to a third party life or property, by or arising out of the use of the vehicle in a public place.
A comprehensive motor insurance policy would include a personal accident and liability only policy (third party insurance) in addition to own damage cover (damage to the owner's vehicle) in one policy.
Common motor insurance categories include:
Some attractive benefits of motor insurance include roadside assistance, cashless servicing at the nation-wide network of workshops and garages, personal accident cover, towing assistance.
Health care costs are increasing every year. A sedentary lifestyle and stress at work negatively affect health and can result in a critical illness or medical emergency. Such a scenario is sure to adversely affect one financially, due to the massive outlay of money on medical expenditure. A health insurance policy is the only way to mitigate financial risks, apart from leading a healthy lifestyle. Health insurance guarantees peace of mind in times of crisis and helps secure their health and that of one's family.
Health insurance covers the medical and surgical expenses of the insured individual due to hospitalization from an illness. Additional riders enhance the benefits and scope of the cover.
Health insurance often includes cashless facility at impaneled hospitals, pre and post hospitalization expenses, ambulance charges, daily cash allowance, etc.
Common types of health insurance policies include:
- Individual Policy
- Family Floater Policy
- Surgery Cover
- Comprehensive Health Insurance
International travel, whether on vacation or business, can turn into a nightmare if one experiences contingencies like loss of baggage, loss of passport, delay in the flight, medical emergency, etc. Such eventualities will surely take the fun away from traveling.
Travel insurance also referred to as visitor insurance, covers one against unseen medical and non-medical emergencies during overseas travel, ensuring a worry-free travel experience. It protects the insured against misfortunes while traveling. Backed up by travel insurance, the whole experience is like no other.
Different types of travel insurance policies include:
- Individual Travel Policy
- Family Travel Policy
- Student Travel Insurance
- Senior Citizens Travel Policy
In addition to the above, some insurance companies offer special plans like a corporate travel policy or comprehensive policy for travel to special destinations like Asia and/or Europe.
Home is often the most treasured possession of an individual and also the largest financial investments one makes in life. Safeguarding the physical structure and contents of the home seems like a logical thing to do.
Home insurance protects the house and/or the contents in it, depending on the scope of insurance policy opted for. It secures the home against natural calamities and man-made disasters and threats. Home insurance protects against risks and damages from fire, burglary, theft, flood, earthquakes, etc. covering the physical asset (building structure) and valuables (contents) in it.
Home insurance ensures that one's hard-earned savings are utilized to meet important needs instead of using them for rebuilding the house if some harm was to come to it.
Business involves the import and export of goods, within national borders, and across international borders. Movement of goods is fraught with the risk of mishaps, which can result in damage and/or destruction of shipments. This leads to substantial financial losses for both the importers as well as the exporters.
Marine cargo insurance covers goods, freight, cargo, and other interests against loss or damage during transit by rail, road, sea, and/or air. Shipments are protected from the time the goods leave the seller's warehouse until they reach the buyer's warehouse. Marine cargo insurance offers complete financial protection during transit of goods and compensates in the event of any loss suffered.
The party is responsible for ensuring the goods are determined by the sales contract. Marine cargo insurance policy can be taken by buyers, sellers, import/export merchants, buying agents, contractors, banks, etc. This type of general insurance policy usually covers the cargo, but can also be extended to cover the interest of a third-party post transfer of ownership as determined by terms of sale.
Common types of policies:
- Open Cover
- Open Policy
- Specific Voyage Policy
- Annual Policy
The hull of a ship or boat can be insured under marine hull insurance.
Rural Insurance
Insurance solutions to meet the needs of agriculture and rural businesses form part of rural insurance. IRDA has stipulated annual targets for insurers to provide insurance to the rural and social sectors.
As per these regulations, insurers are required to meet year-wise targets:
- In percentage terms of policies underwritten and percentage of total gross premium income by general insurers under rural obligation
- In terms of the number of lives under social obligation
Mobile Insurance
As the name of this general insurance policy says, a mobile insurance plan safeguards your phone from accidental damages. In the mobile insurance policy, the insurance company compensates for the repair of your mobile's screen damaged in an accident. The mobile buyers have the freedom to purchase a mobile insurance plan for both new and old mobiles. Mobile insurance is one of those types of general insurance in India that are very affordable as compared to your expensive phones.
Bicycle Insurance
It is not just the two-wheelers and cars; people are these days as well as passionate about expensive bicycles. You can either call it a lifestyle change or fashion, the bicycle is another most wanted product of current time. Many insurance providers offer cover for personal accidents, accidental damage, theft, and even hospitalization with a bicycle insurance policy.
Commercial Insurance
Commercial insurance encompasses solutions for all sectors of the industry arising out of business operations. Insurance solutions for automotive, aviation, construction, chemicals, foods and beverages, manufacturing, oil and gas, pharmaceuticals, power, technology, telecom, textiles, transport, and logistics sectors. It covers small and medium scale enterprises, large corporations as well as multinational companies.
Common types of commercial insurance:
- Property Insurance
- Marine Insurance
- Liability Insurance
- Financial Lines Insurance
- Engineering Insurance
- Energy Insurance
- Employee Benefits Insurance
- International Insurance Solutions
Other Types of General Insurance:
- Property Insurance
- Personal Accident
- Householder
- Shopkeeper
- Corporate Insurance
- Commercial Insurance
- Fire Insurance
- Crop Insurance
General Insurance Companies in India - Public Sector:
Agriculture Insurance Company of India Limited (AIC)
Agriculture Insurance Co. of India was formed on December 20, 2002, on an order of the Government of India, and started its operations from April 1, 2003. The company was been formed to cater to the needs of the agriculture sector and allied activities, and cater especially to the farming community. Agriculture Insurance Co. has 6 promoters including General Insurance Corporation (35%), National Bank for Agriculture And Rural Development (30%), National Insurance Company Limited (8.75%), The New India Assurance Company Limited (8.75%), The Oriental Insurance Company Limited (8.75%) and United India Insurance Company Limited (8.75%).
The products include:
- National Agricultural Insurance Scheme
- National Crop Insurance Programme (NCIP)
- Bio-Fuel Tree/Plant Insurance
- Varsha Bima (Rainfall Insurance)
- Weather Insurance (RABI)
National Insurance Company is one of the oldest general insurance companies in India, having been formed in erstwhile Calcutta on December 5, 1906. It was later nationalized to form National Insurance Company Limited. The company has been a pioneer and has many firsts to its credit, including the introduction of insurance product customization for corporate and rural markets. It is also the first Indian insurance company to have entered into strategic alliances with automobile manufacturers such as Maruti Suzuki and Hero Motors. NIC has also spearheaded bancassurance in the country in partnership with some of the country's largest banks. The company has been given high credit ratings, which demonstrate its strong investment performance in the list of insurance companies.
The products include:
Motor Insurance:
- Private Car Insurance Policy
- Motor Cycle Insurance Policy
Health Insurance:
- Overseas Mediclaim Business and Holiday
- Overseas Mediclaim Employment and Studies
- National Parivar Mediclaim
- National Parivar Mediclaim Plus
Personal Insurance:
- Individual Personal Accident
- Janata Personal Accident
- National Hero Accident Suraksha Policy
- Householders Insurance
Rural Insurance:
- Gramin Suswasthya Microinsurance Policy
- Gramin Suraksha Bima Policy
Industrial Risk Insurance:
- Machinery Insurance
- Contractor All Risk
- Electronic Equipment Insurance
Commercial Risk Insurance:
- Marine Insurance - Specific Policy
- Standard Fire and Special Perils
- Shopkeepers Insurance
- Marine Insurance - Marine Cargo Special Declaration Policy
- Credit Insurance
New India Assurance Company was formed as a part of the Tata business empire on July 23, 1919. It was later nationalized in 1973 and is currently one of the largest general insurance players in the country. In the list of general insurance companies in India, it is the first to reach a gross premium of Rs. 16050 crores. The New India Assurance Co. Ltd. has global re-insurance facilities and a significant international presence across 28 countries.
The products include:
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Personal Insurance
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Commercial Insurance
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Industrial Insurance
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Liability Insurance
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Social Insurance
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- New India Floater Mediclaim Policy
- Householder’s Policy
- Group Mediclaim Policy
- Griha Suvidha Policy
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- Shopkeeper’s Policy
- Jewelers Block Policy
- Bankers Indemnity Policy
- Marine Cargo Policy
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- Fire Policy
- Burglary Policy
- Machinery Breakdown Policy
- Electronic Equipment Policy
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- Public Liability Policy
- Products Liability Policy
- Professional Indemnity Policy
- Directors and Officers Liability Policy
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- Universal Health Insurance Scheme for APL families
- Jan Arogya Bima Policy
- Janata Personal Accident Insurance
- Swavlamban
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The Oriental Insurance Co. specializes in formulating special covers for large industrial projects. This insurance company in India is pioneered laying down systems for smooth conduct of business. All shares of The Oriental Insurance Co. Ltd. are held by the Indian central government. Headquartered in Delhi, it has 31 regional offices and employs over 14,000 people.
The products include:
Motor Policies:
- Private Car Package Policy
- Two-Wheeler Package Policy
- Commercial Vehicle Package Policy
Health Insurance:
- Individual Mediclaim
- Happy Family Floater
- Overseas Mediclaim
- Group Mediclaim
Personal Accident:
- Bhavishya Arogya
- Nagrik Suraksha Policy
- Gramin Accident Insurance
- Janata Personal Accident Policy
Professionals:
- Banker’s Indemnity Insurance Policy
- Directors and Officers Liability Policy
- Sports Insurance Policy
- Stock Brokers Indemnity Insurance Policy
Business Office/Traders/Multi Perils:
- Burglary Policy
- Electronic Equipment Insurance Policy
- Third-Party (Lift) Insurance Policy
- Travel Agent Policy (Guarantee)
Engineering/Industry:
- Engineering Insurance
- Boiler Explosion Insurance
- Product Liability Policy
- Standard Fire and Special Perils Policy (Material Damage)
Motor Vehicle - Private/Commercial:
- Motor Cycle Policy - Act Liability
- Motor Cycle Package Policy
- Private Car Package Policy
- Commercial Vehicle - Goods Carrying Act Liability
Agriculture/Sericulture/Poultry:
- Aquaculture (Shrimp/Prawn) Insurance Policy
- Poultry Insurance
- Honey Bee Insurance Scheme
- Sericulture (Silkworm) Insurance
- Animal Driven Cart/Tanga Insurance
Animals/Birds:
- Cattle Insurance
- Calf/Heifers Rearing Insurance Scheme
- Sheep And Goat Insurance
- Pig Insurance
Aviation:
- Aircraft Spares Insurance Policy
- Aircraft Hull/Liability Insurance Policy
- Aviation Fuelling/Refuelling Liability Insurance Policy
- Aviation Group Loss of Licence Insurance
Marine:
- Marine Insurance - Sailing Vessels
- Marine Hull Policy
- Hull Deductible Insurance Policy
- Marine Insurance Policy (Ocean Voyage)
United India Insurance Company is one of India's leading non-life insurance companies and was formed through a merger of more than 20 companies during the nationalization of the insurance sector in 1972. Headquartered in Chennai, the company today boasts of 1340 offices and over 18,000 employees servicing the length and breadth of the country. Its customer base includes everyone from large corporations to the rural agricultural population.
The products of this general insurance company in India include:
Health Insurance:
- United India Individual Health Insurance Platinum Policy
- United India Individual Health Insurance Gold Policy
- United India Senior Citizens Health Insurance
- United India Insurance Family Medicare Policy
Motor Insurance:
- United India Private Car Package Policy
- United India Two-Wheeler Package Policy
Travel Insurance Plan:
- United India Overseas Mediclaim Policy
Tax Benefits via General Insurance
Of all the forms of general insurance, only Health Insurance comes with tax benefits. As per Section 80D of the income tax act 1961, the premium paid for a health insurance plan qualifies for tax deduction from your total income. The upper limit for this deductible amount is Rs 15,000 and is extendible up to Rs 20,000 for senior citizens. So, if you pay the premium both for yourself and your parents, a maximum of Rs 35,000 will qualify for tax deduction from your total income.
*Tax benefit is subject to changes in tax laws
Disclaimer : *Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
