Life Insurance

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period. For example, at ICICI Prudential Life Insurance, you pay premiums for a specific term and in return, ICICI provide you with a Life Cover. This Life Cover secures your loved ones’ future by paying a lump sum amount in case of an unfortunate event. In some policies, you are paid an amount called Maturity Benefit at the end of the policy term.

Commonly used terms in Life Insurance

  • Life Assured: It is the person who is covered under the insurance policy
  • Proposer: It is the person who pays the premiums of the policy. For example: If you have bought the policy for yourself, then you are both the Life Assured as well as the Proposer. Similarly, if you purchase an insurance policy for a family member, then you are the proposer and the family member is the Life Assured.
  • Nominee or Beneficiary: It is the person you appoint at the time of buying the policy to receive the benefits of your insurance policy, in your absence.
  • Insurer: The insurance company that sells the life insurance policy is called the Insurer (for example, ICICI Prudential Life Insurance).
  • Life Cover: It is the amount that the Insurer will pay to your Nominee in case of an unfortunate event.
  • Maturity Benefit: For Protection + Savings policies, the Insurer pays a certain lump sum of money on completion of the policy term. This amount is known as the Maturity Amount.
  • Premium: A premium is the amount you pay to the insurer for receiving the benefits of the insurance policy. These payments can be made on a regular basis throughout the policy duration, for a limited number of years or just once, as per the options available under the policy you choose.
  • Premium Payment Term: The number of years for which you pay the premiums is known as the Premium Payment Term.
  • Policy Term: The number of years for which the Life Cover continues.

What are the Different Types of Life Insurance?

  • Term Life Insurance Plans – Pure risk covers
  • Unit linked insurance plan (ULIP) – Insurance as well as Investment opportunities
  • Endowment Plan – Insurance and Savings
  • Money-Back – Periodic returns alongside insurance cover
  • Whole Life Insurance – Whole life coverage to the life assured
  • Child's Plan – For achieving your child's life goals like education and marriage
  • Retirement Plan – Post-retirement income

What Affects Your Life Insurance Premiums?

  • Age
  • Gender
  • Smoking
  • Health
  • Lifestyle
  • Family medical history
  • Driving record
 

General Insurance

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that is not determined to be life insurance.

What is general insurance?

Life is full of risks. That’s what makes it so interesting and exciting. But some unexpected events can really set you back.

General insurance helps us protect ourselves and the things we value, such as our homes, our cars and our valuables, from the financial impact of risks, big and small – from fire, flood, storm and earthquake, to theft, car accidents, travel mishaps – and even from the costs of legal action against us. And we can choose the types of risks we wish to cover by choosing the right kind of policy with the features we need.

In general, insurance works by spreading the cost of unexpected risks among a large number of people in the same region who share similar risks.

When you take out an insurance policy, you pay a monthly or annual premium. That money joins the premiums of many thousands of other policyholders and goes into a big pool of funds.

With any luck, you will never need to draw on that pool. But if you happen to be one of the unlucky ones affected by an unexpected calamity, perhaps through severe weather or accident, that pool of funds can be used to help you up to the limit you have selected in your policy.

If things go wrong, your insurer may either repair or replace the items that have been lost or damaged, depending on the terms of your policy. You may also have the choice of receiving a cash settlement for the amount of money agreed in your policy.

Types of General Insurances in India

Almost everything is insurable. However, General Insurance in India is bifurcated as Fire, Engineering, Marine and Miscellaneous Insurance.

Let us look at them as per the use and general acceptability. Following are the different types of General Insurances in India:

  • Health Insurance
  • Travel Insurance
  • Motor Insurance
  • Marine Insurance
  • Home Insurance
  • Commercial Insurance

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