The term insurance is often used very loosely. Most people think that general insurance plans only include car, health etc. There are even misconceptions regarding the policy coverage of these plans. Read on to see what exactly general insurance stands for and the different kinds of plans which come under it.
What are the types of general insurance and their benefits?
General insurance is a contract between the insured and the insurance company for financial protection against loss, damage, theft or other liabilities that may arise. Broadly speaking, it includes all kinds of insurance except life insurance. This financial protection may be in the form of cashless services or reimbursement. Given below are some of the most popular general insurance plans available to you today.
1. Health insurance:
A health insurance policy essentially covers the costs of treatment of a medical condition or accidents. Generally, it includes medical tests, treatment for critical diseases, pre and post hospitalisation expenses etc. as mentioned in your policy wordings. You can also opt for add-on features such as maternity covers and personal accident covers to customise your plan for you and your family.
The benefits of a health insurance plan also include tax benefits under section 80D of the income tax act.
2. Motor insurance:
Whether you have a two-wheeler, a car or a truck, a motor insurance plan will offer you financial protection against loss resulting from damage, accident, theft etc. Broadly, a motor insurance policy includes-
a. Third-party insurance: This is the compensation provided by the insurer for damages caused by the insured to another person or another vehicle. Any individual getting motor insurance must have a third-party liability cover as it is mandatory by law. It can easily be purchased with the purchase of your vehicle itself.
b. Comprehensive insurance: This policy will cover damages occurring to your vehicle due to accidents, theft, natural calamities, fire etc. This will be in addition to third-party liability and will also reimburse you for theft, repairs etc.
3. Travel insurance:
Travel insurance pays for financial losses that arise during one’s travel within India or abroad. The policy might be a single trip plan which covers one trip taken within180 days of purchasing the insurance or a multi-trip plan covering multiple trips during a year. Generally, the scope of a travel plan includes reimbursement for baggage loss/delay, missed flight, medical expenditure, loss of passport etc. You can further pick a plan for individuals/families or even pick between domestic and international travel insurance based on your needs.
4. Home insurance:
Since getting your own home is a big-ticket investment, it is important to insure it. Home insurance plans financially compensate you for any damage to your home and valuables within the property due to natural and man-made disasters, fire, burglaries etc. You also have the option to get additional coverage with add-ons.
Irrespective of the kind of general insurance, the following factors need to be kept in mind before buying a policy:
Assess your needs: It is essential to evaluate your specific requirements instead of going only by someone else's recommendation or even a popular plan. For example, a health plan could either be an individual or a family floater policy.
Check and compare the plan: This would include evaluation of the scope, premium costs, benefits offered, add-on options, the sum assured, exclusions and a plan comparison with the competition.
Read the policy wordings: There are terms and conditions to every contract, so make sure you are thorough with things like exclusions of your policy. The waiting period, i.e. the period after which you may claim treatment of certain illnesses must also be checked.
Now that you have the relevant know-how on general insurance, why delay further? Secure yourself, your loved ones and leave all your worries behind.