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Fundamentals of General Insurance
- DetailsWritten by PolicyBazaar -
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Updated date : 05 February 2020
Today, living in the era of technological advancement and new developments almost every other day, we cannot deny the fact that the life we are leading is always prone to uncertainties and perils. You possibly can predict or assume the future but then what may happen next cannot be guaranteed.
Each one of us is open to various perils at different levels. These perils could differ from an individual, business, assets, stocks, to the properties and so on. Sometimes it could be the loss of life of an individual, health deterioration of a family member, loss of an asset or damage to a property, and so forth.
Though we have less control over such adversities, however, to compensate against such loss, damage or injury the world of finance have designed certain products and services, which essentially caters to the requirements of such people.
Wondering, What is it all about?
Here is the answer…
Insurance… Yes, you read it right!
In case, of any adverse situations, having the right insurance will protect you from any loss, which may lead to financial implications.
The loss and cost could vary depending upon the peril one may encounter.
Besides, providing security to the individual from any potential peril, the insurance sector has also been contributing majorly to the general economic growth of the country.
Insurance has been helping in providing stability in regards to the progressive functioning of the business and can generate long-haul financial resources for many of the industrial projects.
Above everything, in a developing country like India, the Insurance sector has remarkably developed opportunities in regards to employment and has influenced the population towards savings for any prospect.
Buying Peace of Mind- General Insurance
There was a time when people were simply confined up to life insurance. However, today things have changed for better and there has been an increase in the awareness of general insurance eventually.
This is also because with time, dynamics have also changed and there has been an increase in perils. Subconsciously, people have started preparing themselves for any uncertain events, such as any natural calamity, any medical or health-related emergencies, accidents, and so forth.
This is when general insurance appears, which provides a blanket of financial protection.
Eventualities do not come knocking but that does not mean that we cannot prepare ourselves against them. It is better safe than sorry.
Yes, you have one life and of course, you cannot predict what is to happen next. Then what remains in your hand is to invest in the right thing for, which you do not have to regret.
Investing in general insurance will not disappoint you. All you need to be careful about is in what are you intending to put money and has to be on top your priority list and should be done without a miss.
Basics of General Insurance Covers
General insurance is different from life insurance. The policies, which fall under the category of general insurance, are mostly applicable for 1 year. We have many general insurance providers, to name some Reliance general insurance, HDFC ERGO general insurance, etc. from, which you can select buying the general insurance cover.
To be precise, a policy, which is not a part of life insurance, falls under the bracketing of general insurance. Some of the common general insurance covers are as follows:
- Health Insurance
- Motor Insurance
- Travel Insurance
- Home Insurance
Now, let us try to comprehend each of these general insurance covers along with its importance. Read on
Health insurance is a general insurance cover, which essentially offers protection against any medical or health-related perils incurred by the insured person. Today, with a plethora of health insurance providers available in the market such as Religare health insurance, etc. you have the alternative to customize your health insurance policy depending upon the needs, for instance, any pre-existing disease, diabetic prone, diagnosed with cancer and so on.
Some of the major advantages with this general insurance cover include cashless treatment, pre and post hospitalization, diagnosis expenses and much more. Below are some pointers to understand the importance of health insurance policy, which are:
- The expenses related to hospitals and surgeries are expensive these days and can easily create a hole in your pocket. Besides, any medical-related emergency, such as a severe accident or a dental surgery would require a lump sum amount of cash, which at some point of time might become a liability. Having a health insurance policy will provide you financial stability under such perilous situations and one may avail treatment without having to compromise on the quality.
- A health insurance policy also provides compensation on specified particulars mentioned in the policy schedule, which helps you to manage your finances that may be required for any kind of treatment.
The vehicle is one of the most prized possessions and holds high-asset value. A motor insurance policy is generally designed for all types of vehicle owners, which includes car, two-wheeler, etc. This kind of policy can be availed from TATA AIG motor insurance, Bajaj Allianz motor insurance, and so on.
In India, road accidents are a common sight, which happens regularly. Having motor insurance provides you with financial coverage in case of any loss/damage incurred to the vehicle, which, may lead to an unwanted fiscal cost. Besides, motor insurance is categorized into two types that is one for the car and the other for the two-wheelers.
As per The Motors Vehicle Act of 1988, third-party liability insurance is a legal mandate for all types of vehicle owners whether used for private or commercial purpose. Let us take a quick understanding in regards to the importance of having motor insurance, which are:
- In case of a mishap, leading to the loss/damage of a third-party person, vehicle or property, having third-party insurance will provide you coverage against such liabilities.
- Motor insurance provides cover for any natural calamity, man-made calamity any other malevolent acts.
- Any damage to your vehicle could not only be disheartening but may also upset your pocket and give you mental stress. A motor insurance policy will take care of the incurred losses basis the limit one opts under the policy schedule.
The universal truth is that each one of us loves travelling and exploring the destination. Besides, travelling is enticing but it does have its fair share of perils relatively. Having the right travel insurance policy will take care of the unwanted expenses while you are travelling whether domestically or internationally.
Right travel insurance will provide you cover from against any travel-related perils such as accidental death, loss of passport, loss of checked-in baggage, medical-related emergencies, flight cancellation/curtailment and so on. Travel insurance ensures hassle-free and smooth trip, let us take into consideration the importance of the equivalent, which are:
- In foreign countries like the USA or the UK, medical treatment is slightly on an expensive side. Therefore, when travelling to such a destination having travel insurance is necessary with adequate coverage.
- It takes care of the titbits related to your travel plan so that you come back with memories rather than the baggage of worries.
Your home is without a doubt among your most important belongings, which is the reason you should guarantee that it is verified with home insurance. This general insurance cover gives assurance to your home and its substance from different natural and man-made hazards that may come upon it.
Catastrophic events like fire, lightning, seismic tremor, floods, tempest, and tropical storms are unusual dangers that can make broad harm your home. The equivalent can be said for man-made cataclysms like strikes, riots, and so on. A home insurance policy guarantees security for your home in case of such catastrophes. Let us have a quick understanding in regards to the importance of home insurance, which are:
- Home insurance is beneficial when one wishes to renovate/repair the home, as it is an expensive affair in case if the damage incurred is due to any natural calamity.
- Cover for damage caused to overflowing of water tanks, pipes, etc.
- Cover for damage caused due to explosion or implosion.
Wrapping it Up
It is indeed important to understand the role of general insurance for the financial well-being.
On one hand, where insurance is an investment, on the other hand, it is a promise to take care of you in case of adversities.
Taking the above into consideration, the importance of having general insurance covers catering to different needs becomes quite clear. In case, if you do not have one, then what are you waiting for?
Go and buy a suitable general insurance cover.
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