What is the point of saving all your life, and wasting it all away on areas where you can save? Even though buying insurance in India is not mandatory, but a highly suggested purchase especially when your goal is to reduce your financial damage in the face of adversities. All thanks to General insurance in India. From cars to home, and life, there are various types of general insurance available in India. We’ll be understanding what is general insurance in India, and the various types in this guide.
What is General Insurance?
General insurance is a particular sort of insurance cover that attempts to safeguard your possessions, such as the vehicle you drive (motor insurance) and the home you reside in (home insurance). General insurance also aims to protect you from any financial shocks caused by illness-related hospitalization (hospitalization insurance). It reimburses you for expenses spent because of liabilities arising from your personal property, such as an automobile, travel, home, or health.
Still confused about what is general insurance in India? If yes, going through the following example might be helpful.
Suppose your loved one has suffered an unfortunate heart attack, and they require a transplant immediately. And at the same time, you cannot do away with the other liabilities at hand, such as paying your child’s college fees. In such a case, you have considerable expenses to meet consecutively, and both the issues have the same priority. In this hour of need, the health insurance policy for your family can share your burden. It can help you pay your child’s fees from your savings without any worry. In this way, general insurance in India works as your saviour.
Types of General Insurance Policies
Now that you know what is general insurance, (we think we did an
excellent job with the explanation!) Let’s move on to the general insurance
Motor Insurance aims to protect the policyholders against the financial repercussions of the damage inflicted on their vehicle. Unlike other types of general insurance in India, motor insurance is a mandatory purchase. It can be further classified into two categories, two and four-wheeler vehicle insurance. Going a little deeper, further classification includes third-party damage insurance and comprehensive car insurance.
Doesn’t matter if you have a sizeable savings fund, you’re one illness away to exhaust it all. Healthcare in India has always been expensive, and it won’t be any cheaper in the near future as well. A few days of hospital stay can cost you lakhs. An ideal way to protect yourself from the financial burdens of healthcare costs is health insurance. Health insurance is a type of general insurance that covers the medical expenses that result due to illnesses and accidents. Health insurance can provide cover for pre and post-hospitalization, ambulance charges, prescription fees, and other medical bills depending on the policy you have chosen. The most basic categories of health insurance include individual health insurance, family floater health insurance, comprehensive health insurance and critical illness insurance.
Another type of general insurance in India is travel insurance. It covers the expenses that are incurred due to any uncertainty that you may experience when you are travelling. This can include bag theft, luggage loss, any medical emergency, evacuation expenses, trip cancellation and a lot more. Travel general insurance can be It can be primarily grouped into the following sub-categories; individual travel policy, student travel policy, family travel policy, and senior citizen health insurance.
A home is not a trivial and easy purchase. We spend our lives earning to build the house of our dreams. Any damage to it is the last thing we need. This is where home insurance jumps in. Home insurance is a type of general insurance that provides for the damage inflicted on the property. Home insurance gives financial protection against damage caused due to natural calamities, and man-made problems such as theft, riots, and vandalism.
Marine insurance is a type of general insurance that provides for the damage caused to ships, cargo and terminals. It also indemnifies goods, freight, cargo, and other interests against loss or damage during transit by rail, road, sea and/or air.
It is a type of general insurance that offers financial protection to the industrial sectors. However, this type of general insurance is not limited to manufacturing, telecom, textiles or construction. The policy is designed to protect businesses against the financial repercussions arising owing to damage to property, or injury to employees.
As is evident, there are several different types of general insurance policies; each with its own set of features, which provide you security in ways you probably didn’t even consider before.
How to Avail General Insurance?
Now that we have explained what is general insurance in India, and its various kinds, it’s time we talk about its purchase.
General Insurance in India can be bought through a corporate agent, broker or an individual agent. The easiest way to buy general insurance in India is through an insurance company. Now that everything is available online, all thanks to the internet, you can easily buy general insurance online.
To start the process, you have to select an insurer. Ensure that you are only choosing reputable insurers. Don’t be tempted by obscure insurers that offer you cheaper insurance. Always go for the ones that have a high solvency ratio and a claim settlement ratio above 90%.
Once you are done, give good consideration to the coverage amount, premium, policy inclusions and exclusions and the benefits the policy offers you. You can easily get such information on the insurer’s website.
When you have decided everything, you can contact the insurer who will guide you through the process. You might be required to go submit necessary documents and go through several medical tests (according to the type of general insurance).
Inclusion and Exclusion of General Insurance
We are now clear on a lot of things. This includes what is general insurance in India, the certain types and how to buy general insurance in India. Here are a set of inclusions and exclusions of various types of general insurance in India:
|Type of Insurance||Inclusion||Exclusion|
|Motor Insurance||Damage caused to the car in an accident, due to natural calamities, fire/explosion and theft.||Wear and tear, mechanical or electrical damage of the car, tubes/tyres, and contractual liabilities.|
|Health Insurance||Inpatient hospitalization, pre and post-hospitalisation, no claim bonus, annual health check-ups, daycare treatment. (Also depends on your health insurer)||Pre-existing diseases, cosmetic procedures, pregnancy and related conditions, dental, vision or hearing issues, injuries inflicted due to self-harming.|
|Travel Insurance||Loss of baggage, loss of personal documents, passport emergency medical costs incurred during trips, and evacuation expenses.||Planned hospitalization, pre-existing conditions, adventurous sports, expenses incurred during war-like situations.|
|Home Insurance||Damage caused due to natural calamities, riots and theft.||Depreciation loss, cash loss, nuclear war, pre-existing damage, intentional loss, rodent damage, war acts.|
|Marine Insurance||fire, explosion, vessel sinking, |
derailment or overturning of land transport, damage caused due to collision, volcanic eruption, earthquake.
|Loss or damage due to delay, improper packing, negligence of the crew,|
Difference between General Insurance and Life Insurance
Kudos! You’ve made it till here. But of course, just answering the question of what is general insurance isn’t going to make you an expert. So, here we are simplifying what people are confused about 9 out of 10 times. And we’ll do this with the example of our friends, Rohan and Ramesh.
|What is General Insurance||What is Life Insurance|
|Applicability of claim||Rohan purchased a fire insurance policy for his factory. The sum insured under the policy was INR 1 cr. The premium was INR 10 lacs. In case of fire or loss due to any risk, the insurer will pay the claim amount after the deductible (as applicable).||Ramesh purchased a life insurance policy worth INR 1 crore. His annual premium was INR 20000 for 50 years. After 10 instalments, Ramesh met with an accident and passed away. His family received an amount of INR 1 cr. The reimbursement under the life insurance is made either at maturity or death.|
|Amount of reimbursement||Rohan got his car insured for INR 5 lacs. He got his car banged, and the car’s bumper came off. The repair charges for the bumper were INR 15,000. The insurer will pay off the amount after the deductible.||Ramesh purchased a life insurance policy worth INR 50 lacs. The total time for which he had to deposit the premium was 10 years. After 10 years, he received INR 50 lacs.|
|Functional period||Rohan bought fire insurance for his factory. The policy was first issued on March 2, 2019, and it will be renewed on March 1, 2020, since general insurance policies are issued for one year at a time.||A life insurance policy is issued for a lifetime or until the maturity period. Ramesh bought an endowment policy that will pay him some proceeds on the maturity or otherwise pay an amount to his family members in the event of Ramesh’s death.|
We’d like to think that we’ve done a decent job explaining the ins and outs of general insurance. We might have made general insurance easy for you with knowledge, insights, and examples, but now what?
Time to actually buy a general insurance policy because even though you might not have given it much thought, it is necessary in the long run!
In a world full of uncertainties, insurance helps you tackle the unexpected by providing you with a financial safety net. And general insurance is a product designed to give you a stress-free life.
The key here is to understand the intricacies of the general insurance policy you are considering and choose the policy that offers maximum coverage and benefits. In the end, always remember to consult your financial advisor before making an investment decision.
A. Some of the primary types of general insurance include motor Insurance, health insurance, Travel insurance, Home insurance, Marine Insurance, and Commercial Insurance.
A. Life insurance only concerns your lifespan and the financial security of your loved ones in your absence. In contrast, general insurance aims to secure your vital assets, including health, home, and vehicle, among others.
A. It is undoubtedly feasible to get general insurance online. A lot of insurance companies allow you to purchase general insurance coverage online. While we’re on the subject, buying general insurance online is not only safe, but it’s also advantageous in several ways. Faster and easier application, lower premiums, and the ability to view the documentation first-hand are all advantages of obtaining general insurance online.
A. Insurance serves as a safeguard against unanticipated events. Insurance products assist you in reducing risks and providing a financial cushion against unexpected financial hardships.
The three main types of insurance are life insurance, health insurance and motor insurance.
There’s no definite answer to this. But the best insurance policy would be the one that offers you maximum benefits, is friendlier on the pocket and has limited policy restrictions.
One of the most important benefits of buying insurance is that it prepares you financially for any unforeseen circumstances you may experience. It protects you from certain financial repercussions that might destroy your savings in the long run.
Read More: Types of General Insurance in India