Insurance

Life Insurance

Life insurance is a financial agreement between you and an insurance company where:

• You (the policyholder) pay regular amounts called premiums.
• The insurer promises to pay a lump sum of money (called the death benefit) to your chosen person/people (called beneficiaries) if you pass away during the policy term.

Purpose

• Financial protection for your family or dependents
• Helps cover expenses like loans, children’s education, daily living costs, or funeral costs

Types

• Term Life Insurance – Protection for a fixed period (e.g., 10, 20, or 30 years)
• Whole Life Insurance – Covers your entire lifetime and may have savings/investment features
• Endowment Policies – Provide both insurance and lump-sum payout after a set term
• Unit-linked Insurance Plans (ULIPs) – Combine life cover with investment in market-linked funds

Key Points

• Premium depends on your age, health, lifestyle, and coverage amount.
• If the insured person survives the policy term in pure term insurance, no payout is made (unless it’s a return-of-premium plan).
• It’s a safety net—not just for emergencies but for future planning.

General Insurance

General insurance is a type of insurance that protects you against financial losses other than life — usually for your property, health, or liability.

Instead of covering your life (like life insurance), it covers specific assets or risks for a set period.

Main Features

• You pay a premium to the insurance company.
• If a covered loss happens, the insurer compensates you for the actual financial loss (up to the policy limit).
• Usually renewed annually.

Common Types

• Health Insurance – Covers medical expenses for illnesses or accidents.
• Motor Insurance – Covers vehicles against accidents, theft, or damage.
• Home Insurance – Protects your house and belongings from fire, theft, or natural disasters.
• Travel Insurance – Covers trip cancellations, lost luggage, or medical emergencies abroad.
• Commercial/Business Insurance – Protects businesses from property loss, liability, or operational risks.