Are you leaving with your family for the weekend? Just think about all the assets you own, like your house, car, jewellery, and other valuables. What if you lose it all due to fire, theft, or natural disaster? Everything will disappear, even if you haven’t thought about saving it.
Safety is a top concern, and the next challenge is to avoid mess falls. Sometimes you may encounter unexpected losses that you didn’t realize. What then? Are you looking for a security system? Or leave the matter to fate?
Good! Nothing will work except the security system that keeps us going. In other words, we need insurance coverage.
What is General Insurance
General insurance helps us protect ourselves and the things we value. It includes our homes, cars and valuables, from the financial consequences of risks, large and small – from fire, flood, storm and earthquake to theft, car accidents, accidents related to travel. It also saves us from the cost of lawsuits against us. And we can choose the types of risks we want to cover by selecting the right kind of policy with the features we need.
In general, insurance works by distributing the cost of unforeseen risks among many people in the same region who share similar risks.
- The insurer pays the premium with a financial interest in the insured asset.
- The insurer will protect the insured from financial liability in the event of a loss.
Why Do We Need General Insurance?
Imagine that you are driving home in your car, and suddenly you are hit by a taxi. Your vehicle has a dent and its bumper came off too. Now you need Rs. 2000/ – for the dent and 7500/ – for the bumper, so that everything can be repaired.
In this case, an auto insurance policy will play well. You can get a refund on your insurance policy. Your car is an asset you are interested in. But remember that the insurance policy will pay only on pre-established conditions.
How Does the Concept of Insurance other Than Life Insurance work?
Insurance is a concept that applies to a large group of people who may be affected by the same risk in the same conditions or in the same region. The money collected as a bonus can be called a pool, and when someone encounters a loss, they are paid from that pool.
Still not sure how a general insurance policy works? Imagine that your mother suddenly has a heart attack and needs a transplant. At the same time, your daughter must pay for her college tuition. This is a considerable expense that needs to be borne simultaneously, and no one is preferable to the other. During these times of stress, a family health insurance policy can relieve you of the burden, and the costs can be paid from savings. There is a general insurance policy here to save your burden for money.
Key Benefits of General Insurance Plans
General insurance plans are useful for the following reasons:
- The plans cover financial losses and compensate for incurred losses. Thus, general insurance plans keep you financially safe even in the event of unforeseen circumstances.
- In some cases, general insurance plans are mandatory by law. For example, car insurance is compulsory under the Automobile Act of 1988. Likewise, if you are travelling to Schengen countries, you must have a valid foreign health insurance plan. By purchasing such binding plans, you are fulfilling a legal obligation and saving yourself from the violation.
- General insurance plans help protect your savings in an emergency. This way, you can use your savings to achieve your financial goals.
- Health plans, which are a type of general insurance plan, give you tax benefits. Contributions paid for such plans are allowed as a deduction under Section 80D. This deduction helps reduce your taxable income, which in turn lowers your tax liability and enables you to save on taxes.
Various Types of Insurance Other Than Life Insurance
Today, it is essential to know about different insurance types other than life insurance due to the many benefits they offer. Read on to find out more about them:
1. Home Insurance
Since a home is a valuable asset, it is essential to secure it with the right home insurance policy. Home and household insurance protect your home and property. A home insurance policy mainly covers human-made and natural circumstances that can lead to damage or loss.
2. Car Insurance
Car insurance protects your vehicle from damage, accidents, vandalism, theft, and more. There are two forms available: side and full.
When your vehicle is responsible for an accident, third party insurance will take care of the damage caused to the third party. However, you must consider that it does not cover any damage to your vehicle. It is also important to note that third party vehicle insurance is mandatory under the Automobile Act 1988.
A complete insurance policy protects your vehicle from fire, earthquake, theft, impact damage and more. It also provides liability insurance for property damage, injury or death.
3. Travel Insurance
When you travel abroad and suffer losses due to lost luggage, trip cancellations or flight delays, the insurance policy protects you. You may also be offered cashless hospitalization if you are admitted to the hospital while travelling.
4. Health Insurance
Health insurance is a vital tool for risk reduction and emergency assistance. The health plan covers hospitalization costs up to the sum insured. When it comes to health insurance, you can opt for a standalone health policy or a family floater plan that offers all family members coverage.