Insurance is a risk cover, it offers monetary protection against unforeseen circumstances primarily loss of life. It offers an immediate estate to the bereaved family to help them meet their life’s needs for a petty sum to be paid periodically called the premium. There are a plethora of policies to suit a variety of people with diverse needs and premium paying capacity. Let us look at them in detail.
What are the types of Insurance?
Broadly there are 3 types of insurance that a policy holder need to be aware of – Life, General & Medical. Life insurance takes care of providing the family with a lump sum upon demise of the policy holder. General insurance is primarily your vehicle, property and travel insurance. Lastly medical insurance provides cover for your hospitalization expenses. Among life policies, there are again different types of policies to cater to the needs of diverse risk groups.
Do you know your insurance portfolio?
Take a quick self-test to check if you know all the policies in your insurance portfolio (by name and by type) and whether you fully understand the features, returns and restrictions they offer/impose on you.
How do you know which policy is suitable to you? Consulting a financial planner could bring clarity, structure and method to buying the right insurance policies that specifically covers your needs & risks. A planner could help you arrive at a life cover based on your needs and premium paying capacity and recommend suitable products. As for your savings, investment and tax planning needs, the planner could work with you and help you choose products that yield higher returns over the same/reduced tenure with equivalent (low) risk characteristics. In many cases clients find that doing an insurance portfolio review with a financial planner has produced outstanding outcomes that are beneficial both in terms of reduced premiums (up to 70%) as well as substantially higher returns (418%) over a 20-25 year time horizon. In this way you could ensure that you get the most out of your insurance portfolio!!