Various Types of Insurance Policy in India

Types of Insurance: There are a lot of Insurance Types in India. The user can avail of multiple insurance policies as per the requirement. But generally, every earning member of the family should have a Life Insurance Policy and every member of the family should have Health Insurance. The other insurance policies requirement may vary from person to person. The list of main types of insurance policies is given below, but still, there may also be other types of insurances in the market.

  • Life Insurance
  • Health Insurance
  • Motor Insurance
  • Mobile Insurance
  • Home Insurance
  • Travel Insurance
  • Loss of Job Insurance
  • Fire and Burgulary Insurance
  • Shop Owner Insurance
  • Cyber Security Insurance
  • Marine Insurance
  • Construction Insurance
  • Fasal/Crop Insurance
  • Pet Insurance

Life Insurance

Life Insurance is related to the insurance of the life of a person. There are mainly five types of Life Insurance:

  • Term Insurance
  • Whole Life Policy
  • Endownment Plan
  • ULIP
  • Money Back Policy

Let’s understand each of these Life Insurance types in brief.

Term Insurance: A term insurance is an insurance product under which the person insured receives the benefit only if he/she dies during the time for which the insurance policy is bought. If the person dies after that, nothing will be paid by the insurer to the person insured/ nominee.

Whole Life Policy: The policyholder pays regular premiums until his death. After his death, the accumulated amount is paid out to the family. In this, the family will definitely get the benefit of the insurance plan.

Endowment Plan: This plan pays out the sum assured/ insured under both circumstances- death (during the term of the policy) and survival. This plan is a combination of Insurance and Savings. Under the Endowment plan if a person dies during the term of the policy then he/ she will get the sum insured + bonus if any. If a person survives the term of the policy, then he will get is the assured sum.

ULIP: Unit Linked Insurance Plan (ULIP) is a combination of Insurance and Investment for any insurance product, the policyholder pays a certain premium to the insurance company. Under the ULIP plan, a portion of this premium is utilized to provide insurance coverage to the policyholder and the remaining portion is invested in equity and debt instruments (similar to mutual funds).

Investment in ULIP is eligible for tax benefits up to a maximum of Rs. 1.5 Lacs under section 80C of the Income Tax Act. Once your policy term ends, you receive a lump sum amount called the Maturity Benefit. In case of death during the term of the policy, the family receives an amount called the Sum Assured. The Lock-in period for ULIP is 5 years.

Money Back Policy: It pays periodic payments over the policy term and full sum assured in case of death during the policy term. In this, there is a concept of the full sum insured. The policyholder receives periodic payments over the policy term. If he survives the policy period, then he/ she will receive the remaining balance of the sum assured. If he does not survive the Policy Period, then the nominee will get the full sum assured.

Health Insurance

Health Insurance is related to the health of a person or family. The insurance company pays the bill of the hospital in case of illness of the policyholder. The various types of health insurance include:

  • Individual Health Insurance
  • Family Floater Health Insurance
  • Group Health Insurance
  • Senior Citizens Health Insurance
  • Maternity Health Insurance
  • Top-Up Health Insurance
  • Coronavirus Insurance
  • Critical illness Insurance
  • Mediclaim Policy

Let’s understand each of these Health Insurance types in brief:

Individual Health Insurance: In an individual health insurance policy you may cover yourself, your spouse, children, and parents. The medical expenses for illness and injury-related hospitalization, surgery cost, room rent, daycare, etc are covered under this policy. Every member in this policy has an individual sum insured.

Family Floater Health Insurance: In this policy single sum assured is used for all the family members. There is no individual cover in this plan. This plan is beneficial because the premium is comparatively lower in this plan.

Group Health Insurance: This policy is used by a small group of employees working together. If you own a start-up or corporate house, you should use this plan for the group insurance of your employees.

Maternity Health Insurance: In this plan of health insurance, the prenatal stage, delivery, and postnatal stage charges are covered in this health insurance plan. Newly married couples or families planning a baby can have this health insurance plan.

Critical Illness Insurance: In this health insurance plan critical diseases can be covered like Cancer, Stroke, Kidney Failure, Paralysis, Bypass Surgery, Heart Attack, Hypertension, Multiple Sclerosis, Surgery, etc. The treatment of these diseases may be costly for middle-class families.

Top-Up Health Insurance: If you already have a health insurance plan, then you can seek coverage for higher amounts including the increased facilities in the current health insurance plan.

Coronavirus Health Insurance: Many companies have launched special health insurance plans for Coronavirus disease. This plan may cover the expanses in the treatment of the COVID and also the death due to coronavirus. Health workers and Corona fighters can have this Health Insurance plan.

Mediclaim Policy: Mediclaim Insurance compensates for the hospitalization expenses incurred due to illness or accidental stay. It includes inpatient expenses such as nursing charges, surgery expenses, doctor’s fees, oxygen, etc. This insurance is known as Mediclaim policy that is available in the market as group mediclaim, individual mediclaim insurance overseas medical insurance, etc.

Motor Insurance or Vehicle Insurance

Motor Insurance or Vehicle Insurance is like any other insurance, but it is mandatory to have for every vehicle (two-wheelers, four-wheelers, etc.). Vehicle Insurance covers the damage of the vehicle in an accident or natural calamity. It also covers the third party, the damage which our vehicle causes to other persons, property in an accident.

You can have a two-wheeler insurance policy, Car Insurance, Bike Insurance, commercial vehicle insurance policy, four vehicle insurance policy depending upon the type of vehicle you own.

The basic vehicle insurance policy is third-party insurance which is mandatory for every vehicle. The other features like comprehensive vehicle insurance, zero depreciation, engine protection cover, roadside assistance, return to invoice, tyre protect cover, etc are covered in the motor insurance plan.

Mobile Insurance

Mobile insurance is provided by many companies for the protection cover of your mobile phone. Almost everyone has a mobile phone these days and it is used in various conditions which makes the probability of damaging your mobile phone. If you use your mobile phone in rough conditions or if you damage your mobile phone frequently, then you can have mobile insurance. The things related to mobile which are covered and not covered are given in the table below.

What is CoveredWhat is not Covered
Theft or RobberyMysterious Loss
Accidental DamageMobile Phone damage due to climate change
Doorstep pick-up & drop facility for repairPre-existing defects
Mobile Phone liquid damageDeliberate attempt to damage phone
Technical malfunctionsOverloaded or experimented mobile
Replacement & Repair

Home Insurance

Home insurance offers coverage to a house and its content from unforeseen circumstances such as damages caused by natural calamities (earthquake, fire, flood, storm, landslide, etc.) and man-made activities (theft, burglary, terrorism, riot, etc.).

Be it damage or loss to your owned apartment, luxurious bungalow or a rented flat, a home insurance policy cover your home to ensure it always stands strong to give you the shelter and protection you need.

Just by taking fire precautions or putting door locks in, your house isn’t safe. Choose the best home insurance plan that evaluates the value of your home structure and content to derive a pocket-friendly premium for securing your home.

Travel Insurance

You can have travel insurance if you are a frequent traveller, especially in a foreign country. Suppose you are on an exciting holiday in a foreign country and you lost your luggage, stolen or something mishappened, then the travel insurance can help you deal with that situation which can be very costly otherwise.

The travel insurance can be a single trip or multi-trip travel insurance. Travel insurance can help you with accident and sickness medical expenses during travel, Trip cancellation, trip curtailment/ interruption benefits, Delayed baggage, Lost baggage, Lost Passport, Assistance while travelling, Personal liability, Hijack help, delayed flights, Trip Cancellation, Medical emergencies,

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