About Author
The author is qualified MBA in Insurance from Amity University Noida,Uttar Pradesh,India.
Here today I will be discussing about the meaning of Insurance,Principles of Insurance polices,importance of Insurance Policies,what are the important checklist before purchasing Insurance policies in 2023.
Meaning of Insurance Policies
Insurance policy is a contract in which there is an arrangement of pooling of losses "implies spreading of losses incurred by the few over the entire group"of the policyholders is done by insurance company. The policyholder's risks is transferred to insurers,who had agreed to indemnify the insured individual for such fortuitous losses (explicitly mentioned in the policy).
In other words insurance is a contract between two parties,where one is offering a promise to provide compensation in case of losses suffered by the policyholder through covered risk,in return of a consideration which is known as premium.
Following are the essential features of insurance contract
Insurance is contract which has an offer made by insurance company
Acceptance made by the proposer (generally policyholder).
Payment of consideration i.e. premium.
Claim is made to the policyholder in case of losses suffered due to the covered risks.
Principles of Life Insurance Policies
Principle of Insurable Interest: This states that the insured must be in a position to suffer the loss financially if a loss occurs. The purpose of this principle is to reduce gambling, moral hazards and to measure the amount of the insured's loss in property insurance.
Principle of Subrogation: Subrogation means substitution of the insurer in place of the insured for the purpose of claiming compensation from a third person for the loss covered by insurance. Replacement does not apply if damages have not been paid. However, to the extent the loss is paid, the insured gives the insurer the legal right to recover losses from a negligent third party. Its purpose is
To prevent the insured from recovering twice for the same loss
To hold the person at fault responsible for the loss
To keep insurance rates low.
4. Principle of utmost good faith: An insurance contract is based on the principle of utmost good faith i.e. greater honesty is imposed on both parties to an insurance contract than on parties to other contracts. Representations (material, reliable and false), concealment and warranty are three important principles on the principle of utmost good faith.
Importance of Insurance Policies for Women
As we have been experiencing more and more involvement of women work force in different industries such as Education,Banking,IT,Financial Market and even in Heavy Industries also.The gap of unequal pay outs,transparency,equal chance of promotions is bridging,still there is a scope of improvement in financial literacy.
The insurance participation rate among women in rural India is still a pressing issue, as it stands at just 1% only insured and only 29% are aware of insurance products offered, demonstrating the need latest report released by Pay Nearby in association with RBI Innovation Hub ahead of upcoming Union Elections in India.
The report has disclosed that mostly women are going for life insurance policies with 23% are insured and it has positively reported that 18% women has also covered themselves under health insurance schemes.
4 Types of Insurance policies which a women must have in 2023
1.Term Insurance Policy
The term insurance policy is a must now days for saving your family from the financial difficulties in case of your untimely death.The term insurance policy premium is meager if purchased in initial days of employment and give a very good amount of compensation. The premium may start from Rs.600-700 per month for an average age of 25-30 years age group with a risk cover of approximately upto 1 Rs.1crores.The different types of term insurance available for women even covering cancer disease offered
2. Health Insurance Policy
Health insurance policy is a tool for covering the medical treatment,hospitalization expenses,doctors fees,maternity care,critical illness,organ transplant in case of medical emergencies. When one is young he should not assumes that he may not fill ill,because in the recent times number of heart attacks,diabetes and osteoporosis have increased.
3. ULIPs or Endowment Life Insurance Policy
It will be a smart move for a young women to opt for life insurance policy which can offer a mix of investment as well as risk cover in one policy. That is the specialty of an Endowment Life insurance policy or ULIPs. The premium payment term and risk cover can be of different period. The policy offers both maturity benefit as well as death benefit in case of untimely death of the policyholder.
ULIPs offer an exclusive benefit of short term investment and long term risk cover. A part of the premium is kept for covering risk and rest is invested to be return to the policyholder with returns at the time of maturity of the insurance policy in form of lump sum amount.
4. Motor Insurance
At present times with the introduction of Scooters,EVs with automatic transmission system the number of two wheeler and four wheeler ownership by women has experienced a boom. As it is mandatory to buy Third party insurance policy for two wheeler and car insurance,one should go for composite insurance policies with additional covers of Zero-Depreciation and Engine Protection cover. The own damage and bumper to bumper add on cover proves to be a boon at times.
Conclusion
In times of loss, financial worries can increase emotional distress for your loved ones. However, with proper life insurance planning, you can ensure that your family is protected from the financial consequences of your untimely demise,critical illness and any unsought financial emergency.
Read more on
Please feel free to connect with me add your comment.
Does this article help you ?
Yes
No
Any Suggestion ?
Write an answer
Comments