We've all heard a lot about insurance. As a general assumption, insurance is the thing that holds you or the things that you have insured to sustain huge financial losses. But there is more to it than just a cover for what you think is capable of doing harm. We will examine this in more detail.
What is insurance?
Technically, it is a form of risk management in which the insured entity transfers the cost of potential loss to another entity in exchange for a small financial return. This compensation is called premium. In simple terms, it is like paying a lump sum to an entity to protect yourself from future potential losses. Thus, when there is a case of misfortune, the insurer helps you to get through the situation.
Why do we need insurance?
Everyone has this question in mind. Do I really need security? Life is full of surprises; Some good people, some bad people. You just have to be more discriminating with the help you render toward other people. It helps you in that sense of security and peace. There can be many reasons where you may need help, such as serious illness, natural disaster, unexpected death of a loved one, etc. Adequate insurance in such situations provides a significant helping hand in your financial situation. Thus, one should choose the right type of defense according to their needs.
Types of insurance
1. Life insurance
Life protection is one of the traditional forms of insurance, designed to protect you and your loved one from a sudden disaster or disaster. Initially it was built to protect the income of families. But since then, it has evolved into an alternative to just protecting property or tax planning. The need for life cover is calculated on various factors such as number of dependents depending on the person, current savings, financial targets etc.
2. General insurance
Any kind of coverage except life falls under this category. There are many different types of insurance that cover almost every aspect of your life according to your needs:
A. Health insurance
It covers your medical and surgical expenses that may arise during your lifetime. In general, health insurance provides cashless facilities in listed hospitals.
B. Motor insurance
It covers the damage and liability associated with the vehicle (two-wheeler or four-wheeler) against various scenarios. It protects against damage to the vehicle and covers any third party liability stated by law against the owner of the vehicle.
C. Travel insurance
It covers you from emergencies or losses during your travels. It covers unseen medical emergencies, theft or loss of property.
D. Home insurance
It covers home and / or interior materials depending on the scope of the policy. It protects the home from natural and man-made disasters. E. Marine insurance
It covers goods, cargo, etc. from possible damage or loss during transport.
F. Commercial insurance
It provides solutions for all sectors of the industry such as construction, automotive, food, power, technology, etc.
Risk protection requirements may vary from person to person but the basic function of an insurance policy policy is more or less the same.
The most basic principle behind the concept of insurance. 'Risk pooling'. A large number of people are willing to take out insurance against a certain loss or damage and for that they are willing to pay the desired premium. This group of people can be called insurance pool. Now, the company knows that the number of interested people is very large and at the same time the possibility of needing insurance cover is almost impossible. Thus, it allows companies to raise money at regular intervals and settle claims when and where such a situation arises. The most common example of this is auto toe insurance. We all have vehicle insurance, but how many of us have claimed it? This way, you pay for the probability of loss and get insurance and you will be paid if the given occasion occurs.
So when you buy an insurance policy, you pay a regular amount to the company as a policy premium. If and when you decide to make a claim, the insurer will pay the damages covered by the policy. Companies use risk data to calculate the probability of an event - you are looking for insurance to happen. The higher the probability, the higher the policy premium. This process is called underwriting. The company only seeks the actual value of the entity that is insured under the insurance agreement between the parties. For example, if you have insured your ancestral home for Rs 50 lakh, the company will only consider the actual value of the house and will not entertain the emotional value that the house can hold for you, as it is impossible to put a price on emotions. .
There are different terms and conditions for different policies, but the three main general principles are the same for all types:
The cover provided for a property or item is for its actual value and does not take into account any price value.
The probability of a claim should be spread among the policyholders so that the insurance companies should be able to calculate the probability of risk to set the premium for the policy.
The insurance process is often based on a third party. For this reason, anyone is more likely to fall into the trap of a fraudster and his or her network. There is a lack of awareness in the field of motor insurance. So people become victims. Now under the new rules, when two-wheeler owners have to buy third-party insurance for five years. Then private car owners will have to buy the policy for three years. In such a scenario, auto insurance premiums have increased significantly. This new situation gives the fraudsters a golden opportunity to deceive the insurance holders and lure them into their trap by offering them a minimum premium and telling the consumers that this is the right policy. When in reality this does not happen.
Every customer who is insured should contact the insurance company directly at the time of purchase of the policy. Information about the policy and its offer should be obtained. Fraud can be avoided by verifying the insurance customer by going to an email, customer care phone number or website.
Receipt of every premium paid should be saved by taking actual receipt of premium. Nowadays, all insurance policies are equipped with QR codes. This QR code is used to prove the authenticity of the insurance policy. To use it, an application that can read QR is downloaded to the smart phone and the code is scanned.
When buying any policy, the customer should take some time. It should be read carefully. Before buying a policy, one should read the terms of the policy and all the issues contained therein. The best way to escape the clutches of fraudsters is to buy insurance policies directly from companies or their certified agents. Nowadays, almost every company sells policies online.
The insurance customer should always pay the premium by check, credit card or online. This is because his money is deposited directly into the insurance company's account. Often the money given in cash does not reach the insurance company.
Accidents, illnesses and diseases come without warning. And whenever they do, they wipe out your entire savings like a hurricane. As a result, you are financially overwhelmed and overwhelmed with emotional and physical stress. In such cases you are more likely to be financially dependent on others. So we all need to get proper health insurance. But should you adopt individual plans or adopt a family floater? Let me give you a little guidance.
The benefits of an individual plan
As its name implies, personal health insurance covers a person. Your premium is only paid for your return. Cashless claim service With this type of insurance you can get cashless claim service for free. Hospitals are included in the network listed in the insurance policy. This insurance will provide you cashless benefits for medical services. You do not have to pay for this hospital.
Daily allowance at the hospital
Individual plans also have provisions for receiving allowances from the day of hospitalization. It indicates that as a policyholder, you receive a daily allowance. However, it only applies for a minimum of days after the patient is admitted to the hospital. This varies according to each policy.
Tax benefits
According to IRDA, you can get tax benefits on the premium you pay. Which falls under Section 80D of the Income Tax Act.
You can take a separate plan for Corona, all general and stand loan health insurance companies have launched Corona shield insurance policy. It was created keeping in mind the health problems of the people during the Corona period.
It will cover the Corona infected person's hospitalization, other costs associated with treatment related to treatment at home before and after admission, the policy amount for Corona shield policy is minimum 50 thousand rupees and maximum 5 lakh rupees. The term of insurance can be at least 3.5 months, 6.5 months and 9.5 months. The basic cover premium will range from Rs 447 to Rs 5,630.
You can take advantage of insurance exemptions Health insurance can also be helpful in saving taxes. This way medical cover will not only give you peace of mind, but it will also save your hard earned money going into the tax account. The premium paid for a health plan is deductible under section 80D. Find out how much tax is exempt here.
There is a lot to hear about bumper to bumper insurance these days. The reason behind this is the decision of the Madras High Court, which has made bumper to bumper insurance compulsory for 5 years on the purchase of new vehicles in the country from September 1.
Simply put, bumper to bumper insurance covers almost 100 percent of the damage caused by a car or bike accident. It is also often called Zero Depreciation Cover. In this type of insurance the insurance company does not deduct the depreciation of the car parts of the vehicle. The depreciation value of the parts being replaced in general and composite insurance is reduced.
The car owner usually buys comprehensive insurance when buying a car. In which customers get third party liability coverage, cover on damage to vehicle itself, loss due to theft, vandalism. But the big loss is due to the reduction in depreciation value. Now suppose a part of your car breaks down then when you replace it the insurance company does not pay the cost and pay the cost according to the current value of your old part. Due to which the customer has to pay the difference between the price of new part and old part. While bumper to bumper insurance does not.
Bumper to bumper insurance usually includes add-on insurance coverage. It covers almost all parts of the car in the event of a car accident or loss. The bus engine, batteries, tire tubes and glass are not covered. However, some companies also cover the cost of windscreen damage but it is not part of the insurance policy.
Insurance is usually available on the purchase of new vehicles. Includes Comprehensive Insurance for the first year and Third Party Liability Cover for the remaining 4 years. Third party insurance does not cover the occupants of the vehicle but covers the victim of the vehicle accident. In its decision to make bumper to bumper insurance compulsory, New India Insurance Company in its writ petition in the Madras High Court had argued that the deceased had third party insurance.
What if the insurance companies do not listen to your complaint? Strong role of Lokpal
When the insurance companies do not take any action on the complaints of the consumers, the Lokpal (Insurance Ombudsman) comes forward to help the customers. As the order of the Insurance Ombudsman is binding on the insurance companies, the companies have no chance to avoid this. However, the question is, what to do if the company delays in implementing the Lokpal order or does not act as per the order?
The Insurance Regulatory and Development Authority of India recently issued a circular stating that between April and December last year, many insurers did not comply with the order within 30 days as per the rules, nor did they appeal against the order within 60 days. IRDAI has warned such insurers that if the order is not complied with within the time limit, it will be taken seriously.
The Insurance Ombudsman's Office can provide compensation up to a maximum of Rs 30 lakh, including the cost of fighting the case. The insurance ombudsman has to issue an order within 3 months of receiving the policyholder's complaint documents as well as other required documents. One copy of the order is sent to the complainant and one copy to the insurance company. The insurance company is bound to enforce the order within 30 days of receiving the order. The insurance company also has to instruct the ombudsman to enforce the order.
The new rule of 2017 states that the complainant has the right to receive interest on an annual basis from the day of filing the complaint, as per the rule, his claim should be settled. If the company does not make the payment within the stipulated time limit following the order of the ombudsman, the company is entitled to a separate compensation along with interest. The insurance company has to pay an interest rate of 2% more than the interest rate.
How to resolve a complaint
If there is a complaint, you should first contact the grievance redressal officer of your insurance company. You can take the help of the company's website to contact them. If the Grievance Redressal Officer of the company does not respond, or if you are not satisfied with their response, you can go to the IRDAI portal and lodge a complaint at igms.irda.gov.in. You can also complain directly to the insurance ombudsman in your area if you wish. If you are not satisfied with the decision of the Insurance Ombudsman, you can also file a complaint with the Customer Service Protection. Remember, even if your insurance company is dissatisfied with the decision of the Insurance Ombudsman, they have no option but to implement the order of the Ombudsman.
Insurance companies have been asked to introduce short-term standard coped medical insurance policy or covid shield insurance by July 10. The Insurance Regulatory Authority of India (IRDA) has issued guidelines in this regard, saying that the insurance policy has been kept for three and a half months, six and a half months and nine and a half months.
It is worth mentioning that this standard covid insurance policy can be from Rs 50,000 to Rs 5 lakh with a coverage of Rs 50,000. The official said that the name of this type of insurance should be Corona shield insurance. Companies can then add their own name. In addition, the guidelines state that these insurance companies will have to pay a single premium.
The insurance premium should be the same across the country. These insurance companies may not have different premiums depending on the region or geographical location. The director said that these insurance products should include the cost of treating any old or new disease along with the treatment of covid.
This will cover the cost of hospitalization, treatment at home, treatment by AYUSH and before and after hospitalization. The regulator said general and health insurance companies should ensure that such products are available before July 10, 2020.
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