Life is full of uncertainties. Unexpected situations can unsettle even the most well-thought-out plans and make life disrupted and chaotic.
Insurance can make a huge difference when uncertainty stares at you. Insurance coverage can act as a hedge against the risks posed by unpredictability.
There are different types of insurance coverages. There are life insurance policies that offer financial protection to your loved ones in case of your unfortunate death. There are also policies that protect the assets and property.
It is always beneficial to know different types of insurance policies as such an understanding helps you choose the one that aligns with your needs the most.
Types of insurance in India
Insurance is a contract between an insurance company and an individual. It can be divided into two broad categories:
Life Insurance
General Insurance
Let us delve a little deeper into each of them.
Life Insurance: A life insurance policy will protect your loved ones in case of an unfortunate event involving you. It covers your life and in case of unfortunate death the family members will receive financial assistance. The sum assured will be paid to the nominee mentioned by the insured in the policy. You have the flexibility of choosing the policy period, the sum assured and the payout option based on your financial needs and preferences. Some plans also come with an element of saving and investment, making it easier for you to build wealth.
Different types of insurance policies are as follows:
Term life insurance: This type of insurance covers your life for a specific period. It is the most basic and affordable insurance policy that will secure the financial future of your loved ones. You pay a low premium and enjoy a high sum assured. In case of an unfortunate death within the policy period, the loved ones will receive the sum assured according to the payout option chosen at the time of purchase of the policy.
Whole Life insurance: Also referred to as traditional life insurance, the whole life insurance plan will offer coverage for the life of the insured individual. It does not have a restriction on a specific number of years. It will also offer to pay a death benefit. The maturity age for the plan is 100 years and it comes with a savings component. This helps accrue a cash value through the policy term. If the individual outlives the maturity age, then the plan will become matured endowment.
Unit-Linked Insurance Plan (ULIP): A unit-linked insurance plan will offer insurance and investment in one contract. Your premium will be distributed towards investment and insurance. It will be invested in different market-linked equity and debt instruments. ULIPs offer high flexibility and also allow you to choose the premium allocation as per your risk appetite and financial requirements.
Endowment Plans: An endowment plan will cover you from uncertainties of life but will also allow you to save over a specific period. On maturity, the policyholder will receive the lump sum amount in case of survival. In case of death, the sum assured will be paid to the family members of the policyholder.
Child Plans: You can secure the life goals of your child through child plans. It is a life insurance plan that will make it easier for you to achieve long-term goals like higher education and the marriage of your child, even if you are no longer around. The plan is a combination of insurance and savings and will help plan the financial future of your child. The amount received at the time of maturity can be used to meet the financial needs of your child.
Pension Plans: The pension plan is also referred to as a retirement plan and it is an investment plan that will allow you to accumulate a part of the savings over an extended period. You can easily handle the uncertainties after retirement through a pension plan. It will ensure that you continue to receive a regular flow of income. Hence, you can create a financial cushion for life after retirement, where you contribute a certain amount regularly until you retire. Post-retirement, this amount will be given back to you as a pension at regular intervals.
General Insurance
A general insurance policy will help cover other risks and assets including your health, home, business, motor, and more. The policies offer varying coverage and financial protection against losses to your assets. It helps cover everything valuable to you. The different types of insurance policies include:
Motor insurance
Health insurance
Travel insurance
Fire insurance
Home insurance
Marine insurance
Business insurance
Motor insurance: Motor insurance is offered for your car or bike or other type of motor vehicle. The insurance company will compensate you for the losses or damages caused by an accident involving the insured vehicle. In case of third-party damages, the insurance company will pay for the liabilities that may arise. It is mandatory in India for car and bike owners to have third-party liability insurance.
Motor insurance can further be categorized as follows:
private car insurance Four-wheelers owned individually and for personal use will be covered in this plan. There are two policies to choose from-- third-party only liability policy and comprehensive insurance policy. The third-party liability insurance will only pay for the third-party liabilities that may arise. It will not cover damages to your car. Comprehensive car will cover the third-party liabilities and damages to your car in addition to theft, natural and manmade calamities.
Bike insurance: All two-wheeler owners need to have bike insurance in India. It is a type of insurance that will cover accidents and damages to the bike.
Commercial vehicle insurance: When a vehicle is owned and used for commercial purposes, it is essential to have commercial vehicle insurance.
Health insurance
Health insurance policy covers the risk to your health. It will cover the expenses that are incurred for medical care and the plan will either pay at the hospital or reimburse the amount paid for the treatment of an illness or injury. It usually covers daycare procedures, hospitalisation, pre- and post-hospitalisation, and treatment for critical illnesses. The cost of health care is consistently rising in the country and this makes health insurance an absolute necessity. There are different plans you can choose from. These include:
Individual health insurance: This is a basic health insurance coverage that will cover one individual.
Critical illness cover: As the name suggests, the critical illness cover will offer coverage against different life-threatening illnesses such as kidney failure, stroke, cancer, heart attack. The policyholder will receive a lump sum amount on the diagnosis of a critical illness.
Family floater insurance: The family floater insurance will allow you to get coverage for an entire family under a single plan. It includes husband, wife as well as two children.
Group health insurance: The group health insurance is offered by the employer to employees.
Senior citizen health insurance: This insurance plan caters to the individual above the age of 60 years.
Maternity health insurance: The maternity health insurance covers the prenatal, postnatal, and delivery stage expenses. It offers protection to both the mother and the newborn.
Travel insurance
Travel insurance is a policy that will protect you and your family when you are travelling in the country or abroad. It does not matter whether you are travelling solo or in a group, the insurance coverage will ensure you have a peaceful journey. It will take care of the issues you may face in your trip like flight cancellation, loss of baggage, medical emergencies, loss of passport, etc. You can choose from domestic travel insurance, individual travel insurance, international travel insurance, student travel insurance, family travel insurance, and senior citizen travel insurance.
Domestic travel insurance: The type of insurance policy is ideal for travel within the country.
International travel insurance: If you are taking any trips outside India, international travel insurance offers an ideal coverage.
Student travel insurance: For students going abroad for higher studies, the student travel insurance will offer adequate coverage.
Individual travel issuance: The insurance will provide coverage when traveling alone.
Family travel insurance: Suitable for family vacations.
Senior citizen travel insurance: Designed for senior citizens, aged between 60-70 years.
Fire insurance
A fire insurance policy will compensate for the losses incurred due to fire breakout. It helps individuals and companies to reopen their places after extreme damage due to fire. The policy also includes riot losses, turmoil and war risks.
Home insurance
A home insurance policy will protect the structure of your home and the contents inside. If there is any damage or physical destruction, the insurance company will pay for the damages. It will also provide coverage against natural and man-made calamities like tornadoes, fires, robbery, earthquake, and burglary.
Different policies under this category are as follow:
Building insurance: This coverage will protect the structure of the house from damage in any calamity.
Standard fire and special perils policy: This is a type of insurance policy that offers coverage against the damages caused due to natural calamities, earthquakes, fire outbreaks, landslides, floods, storms, and anti-social human activities like riots, strikes, and explosions.
Public liability coverage: It will provide coverage against damage to the third party or guest on the insured property.
Burglary and theft insurance: The insurance offers compensation for the stolen goods in the event of theft or burglary.
Personal accident: The policy will provide financial coverage to the insured and their family against the permanent dismemberment or sudden demise of the individual anywhere in the world.
Landlords’ insurance: It offers coverage to the landlord against contingencies like loss of rent or public liability.
Tenants’ insurance: The policy offers financial protection to the tenant against loss of personal property.
Contents insurance: Contents insurance will offer compensation for the loss of vehicles, furniture as well as other appliances in case of theft, riots, fire, and floods.
Marine insurance
A marine insurance policy will provide protection from losses due to marine perils. These include fire, attack by enemies, collision with a ship or rock, etc. Such events can cause destruction, damage, and the disappearance of the ship or the non-payment of freight. The policy will insure the hull, freight and cargo. The scope of marine insurance is divided into two --ocean marine insurance and inland marine insurance. In the ocean marine insurance, the policy will only insure the marine perils and in inland marine insurance, the inland perils will also be covered.
Business insurance
A business insurance policy will protect the business from financial losses that occur during the operations of the business. It offers coverage for the risks associated with people, and property. It includes third-party liabilities, employee insurance policy, property insurance, and professional liability insurance. The insurance will compensate for the losses incurred due to the business operation or while providing a professional service. One should choose the policy based on the industry the business operates in, the type of business, and the financial requirements of the business.
There are many different insurance typesavailable in the market today. It is advisable to consider your needs first before making the buying decision. You should understand the coverage and terms thoroughly before purchasing. If you need additional coverage on the policy you have, consider adding riders to it to enhance the coverage and make the most of the premium you pay for the policy. Remember to read the inclusions and exclusions on the policy documents.
Each insurance policy is designed to meet the changing demands of consumers and offers financial protection from loss and damages. It is important to choose an appropriate sum assured to ensure adequate protection at all times. Timely payment of premium is necessary to remain covered under the policy.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.
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Ayushman Bharat – a noble but challenging initiative
In the Union Budget announced in 2018, the Finance Minister Mr Arun Jaitley announced what is probably the Central government’s most ambitious programmes, Ayushman Bharat, aimed at providing universal healthcare to all Indians, especially the underprivileged.
This scheme aims to cover more than 10 crore poor and vulnerable families with an insurance cover of Rs. 5 lakh per family.
Ayushman Bharat expects to lead to standardised treatment guidelines for surgical and non-surgical procedures, with extensive use of data analytics to monitor implementation. The programme will also have a positive impact on allied industries such as pharma, medical devices, and diagnostics among others.
Some of the other key benefits of the programme includes:
Though a laudable initiative, the scheme is not without its challenges. To begin with, universal healthcare on this scale will not be easy to execute, and more importantly fund. Within one year of its launch, one has already seen some challenges with regards to funding, and the contribution of states and the Centre.
While patients in urban areas may get access to healthcare, despite Ayushman Bharat, they may not be able to afford the costs of private hospitals. Additionally, rural India which largely lacks medical infrastructure will not benefit in the short-term. And, even if the state/ Central government were to build physical infrastructure, staffing them with qualified medical personnel would remain a challenge.
Despite economies of scale being an incentive, private hospitals may not necessarily agree to the prices prescribed by the government for treatment of patients under the programme. Similarly, with prices capped, it will lead to lower profits for pharma and device companies, who may become loath to offer their cutting edge advanced products and technologies in this market, depriving even those patients who can afford to pay for them with access.
Additionally, Integration of the Central programme with those launched by several state governments will remain contentious, and finally, while funding agencies may fund the programme, the money still has to be repaid and tax payers may well feel saddled by an additional burden.
National Consumer Rights Day: Know Your Insurance Rights
Consumers are essential for the nation's economy. Without consumers, there would be no buying and selling of goods and services. Therefore, consumers must be given certain rights. Plus, with the increased popularity of e-commerce industries, the need to protect consumer rights is higher than ever. As a consumer and policyholder, you hold certain rights when it comes to insurance. This National Consumer Rights Day, let's find out what those rights entail.
What is National Consumer Rights Day?Celebrated on 24th December every year, National Consumer Right Day promotes the rights of consumers across the country. People participate in campaigns to raise awareness about consumer rights. As a consumer, you can talk about fraudulent incidents on social media platforms to call out the violators.
Understanding consumers' insurance rightsToday, insurance should be an integral part of your financial planning. Insurance provides financial protection against unwarranted circumstances. As a policyholder, you should be aware of the following rights:
Before buying any policy, you have the right to ask the insurer everything you wish to know about the policy. Per the Insurance Regulatory and Development Authority of India (IRDAI), the insurance provider must communicate all policy-related information to you. Information includes inclusions, exclusions, waiting periods, deductibles, add-on riders etc.
Typically, you pay a lump sum annual premium towards most insurance policies. However, IRDAI has allowed insurance providers to accept premiums via monthly, quarterly or half-yearly instalments. This offers relief to policyholders. You can conveniently change the frequency of the premium payments during policy renewals.
You can file a complaint against an insurance company. You can approach the insurer's grievance redressal cell. If you are dissatisfied with the response, you can voice your issues with the grievance redressal cell under the IRDAI's Consumer Affairs Department. You can also file complaints about delayed maturity payments and claim denials.
Per IRDAI, an insurer must settle your insurance claims within 30 to 45 days of receiving the last necessary document. If there's a delay, the insurer pays 2% interest from the day the insurer receives the last document until finally paying the claim amount. Also, an insurer cannot reject your claim if you have held a policy with the insurer for eight consecutive years without a break.
Buy general insuranceAll non-life insurance policies come under the ambit of general insurance. You can pay for expensive medical treatments with health insurance and pay for repairing accidental damage to your vehicle with motor insurance. Home insurance keeps your home and its content protected from the aftermath of natural and human-made disasters. Lastly, you can finance unforeseen expenses during your international trips with travel insurance.
This National Consumer Right Day, take a moment to understand your insurance rights before buying your general insurance policies.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.FAQs on COVID-19
"What is coronavirus"? This was the most asked question of 2020. As COVID-19, the illness caused by a new kind of coronavirus is spreading fast, you must be armed with the correct information about it and how you can prevent it. While fear is normal during these testing times, staying informed from reliable sources is a great way to allay your doubts. Thus, it is critical that you know everything there is to know about COVID-19.
Here are the answers to most frequently asked questions on COVID-19.
What is COVID19?
COVID-19 is a contagious illness that is caused by a newly discovered coronavirus. It can spread from one infected person to another healthy person. Coronaviruses are viruses that are found among animals with some of them also known to infect humans.
How does it spread?
It spreads just like the common cold. It mainly spreads from one person to another person, especially when they are in close contact. It also spreads through the respiratory droplets produced when an infected person sneezes or coughs.
What are the symptoms of COVID-19?<
Some of the common COVID-19 symptoms are:
How can I protect myself?
There are several ways in which you can reduce your chances of getting infected or spreading COVID-19. Here are some simple precautions that you should follow
Who is at risk?
People who are above the age of 65 and those who have weak immune systems are at higher risk of developing severe complications from COVID-19. Also, people of all ages with medical conditions like chronic lung disease, diabetes, asthma, heart conditions and liver diseases are also at high risk of falling severely ill after contracting COVID-19.
Is it true that garlic and saltwater can prevent COVID-19?
There are several myths that are circling on social media. However, we advise you not to fall for them. Some of the common myths are: parcels from China can spread COVID-19, home remedies can cure COVID-19 and you can catch coronavirus by eating Chinese food. All these are unfounded myths. If you want to keep yourself updated with coronavirus related news, it is best to follow trusted websites.
At, SBI General Insurance, we urge you to stay indoors, stay informed and alert. It is just as essential that you take the necessary precautions of updating your Health Insurance Plans, ensuring you have adequate coverage. Remember to consult your doctor if your notice any coronavirus symptoms. Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.
Global Handwashing Day 2022: How Handwashing Prevents Diseases?
If the pandemic has taught us anything, it would be the importance of basic hygiene practices. Not all surfaces we touch are clean. You never know what germs, bacteria or viruses can enter your body. This Global Handwashing Day, let’s increase awareness and understand the importance of handwashing.
Global Handwashing Day – History & significanceFounded by the Global Handwashing Partnership, Global Handwashing Day is celebrated on the 15th of October every year. In 2008, over 120 million children across 70 countries washed their hands with soap to commemorate the first–ever Global Handwashing Day. The initiative aims to implement creative ways to encourage people to wash their hands with soap. National leaders can take this opportunity to demonstrate the simplicity of handwashing by building sinks and tippy taps. The theme for Global Handwashing Day 2022 is ‘Unite for Universal Hand Hygiene’.
Why You Shouldn’t Take Handwashing Lightly?Disease–causing bacteria and viruses are present all around us. Here’s how these germs can spread:
Washing your hands with water alone is not enough. The soap’s molecular structure traps dirt and germs in tiny bubbles known as micelles. These get washed away with water. Hence, handwashing with both soap and water is crucial to prevent diseases from spreading.
Ways to Maintain Hygiene?While handwashing is the best line of defence, you should also practice essential hygiene habits to minimise the risk of contracting diseases. These include:
Bathing regularly: The human body sheds skin constantly. The build-up of dead skin is a breeding ground for bacteria that can make their way into the body through the mouth or nose. Ensure you regularly clean your body and hair with soap and water.
Trimming nails: Dirt can build up between fingernails. Even with thorough handwashing, getting rid of infected nail beds can be difficult. It helps to trim your finger and toenails frequently. Remember to lather soap under your nails while washing your hands.
Covering your mouth while sneezing or coughing: Covering your cough or sneeze is an effective way to stop the spread of germs. You could unintentionally spread germs by expelling microscopic water droplets. The right way to sneeze or cough is into a handkerchief. Ensure you wash your hands right away. It also helps to carry hand sanitiser in your bag.
Handwashing can reduce the risk of contracting diseases through physical contact. Unfortunately, you may also be at risk of air–borne or water–borne diseases. However, health insurance helps cover the expenses of treating such illnesses and numerous other conditions. A health insurance plan is simply a contract between you and your insurance company, wherein the insurer promises to cover your medical costs up to a predetermined sum insured. Insurance provides you peace of mind and allows you to concentrate on getting the best treatment.
This Global Handwashing Day, ensure you secure your health financially with health insurance.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.