Understanding the Intricacies of an Insurance Policy

Many risks await a typical individual and his family in today’s situation. Let’s learn what all are these risks, how can they be insured and what all are the policies that best suit our purpose, through this article.

Auto Insurance For Your Vehicles

In the first half of 2008, the tariff controls over vehicle insurances  was lifted. This resulted in tight competition in this sector. Unlike the traditional policy coverage measures, the new generation companies introduced policies that best suit the customers’ needs and related services. The individual user, model of the vehicle, oldness of the vehicle etc. will fetch drastic premium concessions nowadays.

So, availing a professional’s help to compare different policies offered by different insurance companies will help you choose a policy that offers maximum coverage at minimum premium amounts. Lot of things need to be taken care of while choosing a vehicle loan.

Make sure that the vehicle is insured for adequate amounts. Inquire how much of extra expense the owner should take up. Understand the extent of insurance coverage for co-travellers and the underlying risks in the policies; especially while going for a newly introduced policy.

The vehicle owners often must pay the depreciation amount by themselves. This is one of the major problems faced by the vehicle owners. But nowadays, there are policies that give entire repair amounts without any depreciation. This will be better for expensive vehicles. Besides this there are policies that offer coverage for engine problems, paint expenses, transportation expenses if the vehicle breaks down or something on road, accommodation expenses if that happens, taxi fares to the destination, expenses to meet engine troubles that arise when water gets into the engine while driving through roads in monsoon season, facilities to extent the warranty given by vehicle companies to the engine etc.

Even the premium cars that cost lakhs run on roads with insurance policies that don’t offer adequate coverage. The owner might have taken into account only the lesser premium amounts while going for such a policy.

The financial security of a family depends on the income of the head of the family. Hence there is no doubt that any unexpected disasters that may happen to them can smash the economic balance of the family. Children’s education, marriage, house building, downfall of institutions where we work etc. can bring about uncompromising financial crisis.

Ensuring adequate insurance coverage for the head of the family is the single way our by which these situations can be crossed over, at least to an extent. More than 20 companies that work in India, brings about more than 200 policies for the same. Unfortunately, majority will be having a policy prescribed by an insurance agent who, in most cases, happens to be an acquaintance. Most of the policy holders will be ignorant of the coverage that their policies offer.

While choosing an insurance policy, a precise financial planning need to be done based on the head of the family’s income and expenses. The policy should ultimately benefit the policy holder, not the company or the intermediaries. Basically, there are four important life insurance policies:

1. Endowment
2. Money Back
3. Unit Linked Investment
4. Term Life

The first two belongs to savings section. Also, after a fixed period the insurance amount and the company’s profit share will be given to the policy holder. Marriage policies, policies for children etc. belongs to this category. But money back policies provide the policy holder with a fixed amount in fixed intervals. Term assurance policies are those which ensure coverage of huge amounts for the least premiums. But most people gather that they won’t get the premium amounts back. Most people do not know that policies are there which gives back the entire premium amounts if the policy holder is alive even after the policy period.

Our average life period has considerably increased over the years. Hospital expenses that arise from unexpected diseases, accidents etc. disrupts the balancing of the family budget. The life styles of the new generation, food habits, lack of exercise, mental pressures etc. will eventually ends us up in the clutches of various diseases. New diseases are arising on a daily scale. The sky rocketing prices of modern medicines and treatment scares the hell out of many a lot.

Policies are available these days that considerably back up the medical expenses. Policies that cover fatal diseases, those which avail concessions from hospitals, those which offer maternity related concessions, policies that cover existing diseases etc. are some of those. These policies are sold out through general insurance companies in both private and public sectors.

Major health insurance companies in India like Star Health and Apollo Munich have policies that suit middle class people as well as those who have high salary. There are policies for individuals, family members and groups. Group policies require comparably lesser premiums. They will offer many coverage packages too. Floater policies are in demand than individual policies, today. Floater policies bring the members of a family under a sum insured amount. The specialties of floater policies are that any member who comes under the coverage can use the insurance amount wholly or partially and that the premium amounts will be pretty low.

Usually a policy covers almost all aspects of the treatment including doctor’s fee, surgery, ICU, room rent, medicine, x- ray, scan, lab charges etc. Many companies offer policies that offer Rs. 5000 to Rs. 20,000 as monthly financial allowance to families. Latest products offer the following privileges too in addition to the already mentioned ones:

1. Daily Hospitalization: Besides the treatment expenses, this type of policies gives us daily Rs. 500 to Rs. 4000 for continuous 90 or 180 days. This policy compromises the income loss that one may encounter due to hospitalization.
2. Critical Illness: Chances are there that diseases that can leave one unproductive whole life long may affect us. In such situations, this type of policy gives a fixed amount of Rs. 1 lakh to 10 lakhs. For example, heart diseases, cancer, kidney diseases, stroke etc.
3. Top up Coverages: If you are already a mediclaim holder, the coverage amount may not suffice for the treatment of a particular disease that comes up later. Top up coverages will be of help in these situations. You will get an amount greater than the actual policy amount through this.

Home insurance ensures enough protection to our hard-earned home and home appliances. Around 15 general insurance companies that function in India offer different home insurance policies. The basic coverage clauses in all these policies are almost the same. These policies offer from eight up to 12 coverage packages. Let’s find out which all are the essential sections.

1. Fire Insurance: This insures the building and all the appliances inside it from fire, wind, flood, calamities, lightning, short circuit and other natural calamities.
2. Burglary Insurance : Since both husband and wife will be employed in an average middle class home nowadays, most houses will be locked up during day time. Hence robbery attempts focusing these houses are soaring on sky high ratios. Policies are there that ensure coverage against potential robbery possibilities. Usually all expensive and inexpensive stuffs inside the house will come under the coverage. But some very valuable materials like gold, diamond, costly watches, camera, laptop etc. won’t come under burglary section. There are separate policies for these items.
3. Electrical Devices Damage Insurance : Any electrical or mechanical device that we run at home can be insured under this section. The money that we spend due to machine damages can be availed back thus, through these policies. A thing to notice is this that, if a device gets damaged due to short circuit and even if it was insured under the Fire section, the claim will be rejected if there is no break down coverage.
4. Electronic Devices Insurance: Many modern electronic devices have become so much a part of our lives. For example, computer, T.V, DVD player etc. This section insures these electronic devices against damages.
5. All Risk Coverage Insurance : This is one of the most popular sections of this period. Our savings in gold ornaments, laptop, camera, diamond ornaments etc. comes under this section. When compared to burglary insurance, the main draw of All Risk coverage is that we will get the claim even if we loose these stuffs while in a journey or during a road side robbery etc.
6. Workmen Insurance: Most of the servants these days are well aware of the intricacies of legal set up. So they know that the owner of the house should pay them compensations for any accidental disasters that may happen to them during their work time. The house owner can get hold of this amount through work men compensation policy. House owners are obliged to give compensations if the servants encounter any accidents while in work. The insurance companies will provide the workers with these compensation amounts.
7. Accident Policies: Most of us have to travel a lot as part of our career or business. Also, we work in perilous situations as part of our career. There is no doubt that the untimely death of the head of the family will ruin the financial balance of a family. It hasn’t happened so far doesn’t imply that it cannot happen tomorrow. So an insurance equivalent to the income of the head of the family is a prerequisite. There are policies that cover risks including accidental deaths, permanent disability, temporary disability etc. Not just that, there are policies that offer a fixed weekly income for 104 weeks when you take rest after an accident.