TOPIC-

INSURANCE
 What Is Insurance?
Insurance is a legal agreement between two parties i.e. the insurance company (insurer) and the individual
(insured). In this, the insurance company promises to make good the losses of the insured on happening of the
insured contingency. The contingency is the event which causes a loss. It can be the death of the policyholder
or damage/destruction of the property. It’s called a contingency because there’s an uncertainty regarding
happening of the event. The insured pays a premium in return for the promise made by the insurer.

KEY TAKEAWAYS
• Insurance is a contract (policy) in which an insurer indemnifies
another against losses from specific contingencies or perils.
• There are many types of insurance policies. Life, health,
homeowners, and auto are the most common forms of insurance.
• The core components that make up most insurance policies are the
deductible, policy limit, and premium.
How Insurance Works ?
Basically , Insurance is a Pooling Management in which
people join a pool system and pay for being the member of
that pool (such payment is called Premium). Now this money
collected by the pool members is then used to compensate the
members who suffer losses in their duration as a member of
the pool system.
Now in a pool there will not be 10 or 20 members , there may
be hundreds or thousands of members who will pay for being
the pool members. Now, practically not everyone will suffer
loss in the system and thus the Insurance Companies or the
Insurer or the pool manager will benefit from such members
or Insurance Contract Holders. For this system to be fair ,
there has to be some members who suffer loss else there will
be no need to be a member of such a management.
Term Insurance Plan
Term insurance is a type of life insurance where the insurer provides coverage
for a certain 'term' in exchange for a specific premium paid over a period of
time. If insured dies during the term period specified in the policy, a death
benefit is paid to the family of the insured. Term insurance plan or a term
insurance policy is a life insurance product which guarantees payout to the
nominees upon death of the insured. In return to this guarantee, a fixed amount
of premium is deducted at specific intervals. All term insurance plans &
companies are regulated under IRDAI, (Insurance Regulatory and Development
Authority of India).

Why need Term Insurance?

To take care of my family To pay off my loans Make provision for uncertainties
Benefits of a term insurance plan
Affordability
Term insurance plans are a combination of affordability with simplicity. You get a life cover of 25L at premiums that are easy on your
pocket
Tax Benefits
You can avail tax benefits under section 80C of the Income Tax Act, 1961, for the premium paid and sum assured of your term insurance
plan. Visit Income Tax website to know more about all tax deductions.
Easy to Buy
Instead of stepping out of your home, you can now purchase term insurance plans online with a few clicks, as per your convenience. Buy
Now
Claim Payouts can be Staggered
Staggered monthly payouts provide an option to claim a lump sum and the rest of the claim as Monthly Income preventing any misuse of
the total cover.
Flexibility in Premium Payments
You have the option to pay premiums on a monthly, semi-annual, or annual basis. Also, there are also term insurance plans that offer single
pay premium option.
Additional Benefit with AD Rider
You get the option to add extra protection to your life in case of death due to accident with Aegon Life Accidental Death Benefit Rider

Protection Against Liabilities

During our lifetime, we buy a car, house, etc. In case a mishap occurs to you - accident or demise - the term insurance plan replaces your
financial role in the family.
Types of term insurance
1. Level Term Plans
•The default life insurance coverage provided by most insurers in India is a level term plan. It is the most common type of term insurance plan.
•In this type of plan, the sum assured selected at the beginning of the policy remains constant throughout the policy term.
•The lower your age while buying a level term plan the lower will be your premium.
2. Increasing Term Insurance
•This type of plan offers the facility to increase your sum assured at specific points in the policy term.
•The rate of this increase is predetermined.
•This type of plan is a great choice for keeping up with rising prices and ensuring that your family has enough funds to sustain after inflation.
•An increasing term policy is best suited for you if you predict a considerable rise in your financial liabilities in the future.
•The tenure for this kind of term plan is usually more than that of other types of term insurance.
3. Decreasing term insurance
•As opposed to increasing term insurance, in this case, the sum assured decreases at a predetermined rate as your age increases.
•It works on the idea that as your age increases, your liabilities might decrease and the need for a higher sum assured too might decrease.
•It is well suited for you if you have taken a loan or a mortgage and expect to pay it off in the near future.
4. Return of Premium Term Insurance
•A new and very popular type of term plan, a return of premium plan, provides you with a savings component, which is generally not offered by
term plans.
•In the event that you outlive your policy term, all paid premiums till the maturity date are returned to you.
•The return of premium is made only if you haven’t made any claim during the policy term.
5. Convertible Term Plans
•A convertible term insurance plan is a policy that can be converted into another type of insurance plan at a later stage; for example, a whole life
plan or an endowment plan.
•If you expect your financial priorities to change in the coming years, you can opt for this type of term plan.
•For instance, if you are currently risk-averse, but expect to become more flexible in that regard, you can opt for a term plan that can be converted
into a whole life plan.
Best Term Insurance Plans
1. LIC Tech Term Plan
It is a traditional term plan, providing financial support to the insured’s family in case of his or her untimely demise. This
term plan comes with several essential features such as 2 death benefit options- Level Sum Assured and Increasing Sum
Assured, policy term between 10-40 years, and maturity age till 80 years.

2. HDFC Click2Protect Plus

This comprehensive term plan offers 3 cover options – Life and CI Rebalance, Life Protect, and Income Plus, from which
the policyholder can select as per their requirements. It comes with an option that auto balances death and critical illness
benefits with the increase in age and offers whole life cover.

3. Max Life Smart Secure Plus Plan

The Smart Secure Plus Plan by Max Life Insurance gives you the flexibility to customize coverage protection at a
reasonable price by offering 2 death benefit covers to choose from. It also provides different payout options to suit the
insured’s requirement, which comprises a lump-sum payment, monthly income payment, and partly in a lump sum and
partly as monthly income. In addition, it provides terminal illness coverage as well as returns all the premiums paid on
policy maturity.
Health Insurance
Health insurance is a type of insurance that covers medical expenses that arise due to an illness. These expenses could be
related to hospitalization costs, cost of medicines or doctor consultation fees.

There are two basic types of health insurance:

1. Mediclaim Plans

Mediclaim or hospitalization plans are the most basic type of health insurance plans. They cover the cost of treatment
when you are admitted to the hospital. The payout is made on actual expenses incurred in the hospital by submitting
original bills. Most of these plans cover the entire family up to a certain limit.

2. Critical Illness Insurance Plans

Critical Illness Insurance Plans cover specific life-threatening diseases. These diseases could require prolonged treatment
or even change in lifestyle. Unlike hospitalization plans, the payout is made on Critical Illness cover chosen by the
customer and not on actual expenses incurred in the hospital. The cover gives the flexibility to use the monies for
changing lifestyle and medicines. Also it's a substitute for income for the time you could not resume work due to illness.
Payout under these plans are made on the diagnosis of the disease for which the original medical bills are not required.
Benefits & Advantages of Health Insurance Policy
1. Hospitalization Expenses
One of the most significant benefits of health insurance policies in India is that they cover hospitalization charges.
2. Pre and Post Hospitalization Costs
It is not always necessary that you have to be hospitalized to incur huge medical expenses. Pre-hospitalization costs for diagnostic tests as
well as follow-up post-hospitalization costs can also be quite substantial. A health insurance policy helps to cover such costs, as well.

3. Cost for Day-Care Procedures

Well, not always. But if you have health insurance from Digit, you can avail coverage for such day-care expenses. This includes the
medical expenses that you incur in a hospital while being there for less than 24 hours, due to advancement in the medical field.

4. Refill Sum Insured Amount

This feature of health insurance policies allows you to refill your sum insured amount if you have exhausted the existing sum insured.
Refill sum insured benefit is only available for an unrelated illness. This benefit is especially helpful if you have a family floater insurance
cover, and your entire family is sharing a single policy.
5. Cover your Daily Expenses with Hospital Cash Benefit
Hospitalization may lead you to be laid off from your job for a few days. In this scenario, you may face a cash crunch, making you
hesitant to spend on your daily needs. But with a daily cash allowance from your health insurance policy, you can overcome this situation
easily.
6. Get Your Transportation Costs Reimbursed with Ambulance Cover
Ambulance charges, especially if you are residing in metropolitan cities, can be quite high. For instance, in Bangalore, it can range up to
Rs. 5,000, with transport from outside the city being even higher. So, having a health insurance policy in place can help you cover the
costs incurred during transportation through an ambulance.
7. Get Increased Sum Insured as No Claim Bonus Benefit
Insurance providers extend the benefit of No Claim Bonus in the form of an
additional sum insured amount at the same premium payment for the
subsequent year. This No Claim Bonus can range between 10% and 20%. This
makes for one of the most useful benefits of having health insurance.

8. Maintain Good Health with Complimentary Annual Health Check-Ups

Your health insurance policy will cover the expenses for this medical check-
up, once in each year. This is a complimentary benefit that is extended by
insurance providers on the renewal of your policy.

9. Get Maternity & Infertility Treatment Benefit and Newborn Care

Cover
This is an add-on benefit that can be availed by those who are planning to have
a baby after 2 years from the date of availing the policy

10. Enjoy Income Tax Benefits

Under Section 80D of the Income Tax Act 1961, you can enjoy tax benefits on
the premium paid towards your health insurance policy.
Travel insurance
Travel insurance is an insurance product for covering unforeseen losses incurred while travelling, either internationally or
domestically. Basic policies generally only cover emergency medical expenses while overseas, while comprehensive
policies typically include coverage for trip cancellation, lost luggage, flight delays, public liability, and other expenses.

Advantages of Travel Insurance to travellers:

 It protects you against losses during travel

 It compensates medical expenses:

 It covers against changes to the trip itinerary

 It covers personal liability

The Types of Travel Insurance Plans in India
1. DOMESTIC TRAVEL INSURANCE PLAN
This policy is designed for customers intending to travel within the contours of the country.
2. INTERNATIONAL TRAVEL INSURANCE
This policy is designed in keeping with what customers travelling internationally. Besides the usual coverage offered by its domestic
counterpart, an international travel insurance policy safeguards policyholder against risks of a flight hijack, repatriation to India, etc.

3. GROUP TRAVEL INSURANCE

it can help you save plenty on premiums, without having to compromise on the safety net against any unanticipated and adverse
development that might take shape through the course of the trip.
4. MEDICAL TRAVEL INSURANCE
the policy specifically designed to cover expenses emanating from medical emergencies and other healthcare-related concerns. However,
the exact set of inclusions and exclusions will vary across insurance providers.
5. SENIOR CITIZEN TRAVEL INSURANCE
a policy that is directed at senior citizens (generally belonging to the age group of 61-70 years) offers additional coverage against dental
treatments/procedures as well as cashless hospitalization.
6. SINGLE AND MULTI-TRIP TRAVEL INSURANCE
A single-trip travel insurance policy retains its validity through the time on a trip. It covers both medical as well as non-medical expenses
(such as baggage loss, delays in flights, etc.).Multi-trip travel insurance policy, on the other hand, provides extended coverage (lasting
usually a year in most cases) so that frequent flyers don’t have to go through the entire process of availing insurance every time they prep
for travel.
Best Travel Insurance Plans
#1. ICICI Lombard Travel Insurance
ICICI Lombard has 360 days of travel insurance, an initial 180 days of policy which can be
extended further up to 180 days. The insurance covers for medical assistance and total loss of
checked-in baggage including handbags.
#2. Bharti AXA Travel Insurance
Bharti AXA travel insurance has a worldwide presence in 130+ countries. Plus a 24 X
7 claim assistance and strong customer support through Bharti Assist Global for all
insurance-related matters. Bharti AXA does not require you to undergo any medical
check-up to 70 years. You would get an option to choose from three Schengen travel
insurance plans which cover all the 26 Schengen countries.

#3. SBI General Travel Insurance

SBI general insurance has medical cover up to $500,000. However, it covers only those
medical expenses which are primarily in the nature of an emergency. Further, SBI does not
cover if you are travelling against medical advice or have a pre-medical condition or are
travelling to get involved in adventure sports. The insurer provides a free automatic
extension for 7 days for delays due to public transport services. Further, the extension of
travel insurance is permissible for a maximum of 180 days with a condition that the overall
trip duration is not more than 270 days.
Vehicle/Motor insurance
Vehicle insurance is insurance purchased for cars,
trucks, motorcycles, and other road vehicles.
In India it is compulsory to have vehicle insurance
before using or keeping a motor vehicle on public
roads.
Vehicle insurance would typically cover both the
property risk (theft or damage to the vehicle) and the
liability risk (legal claims arising from an accident).
Vehicle insurance is insurance purchased for cars,
trucks, motorcycles, and other road vehicles.
Advantages of having a motor insurance
 Coverage against accident: A motor insurance can give you a coverage against damage happened to your vehicle
due to some accidents. You can claim the expenses and save more money.

 Coverage against natural disaster: A sudden huge flood can damage your vehicle which will cause you to incur a
huge expense. With the motor insurance, you can save few bucks on vehicle repairs.

 Legal protection: As having no motor insurance is a violation of traffic laws, it can lead to paying penalties. Hence,
it’s important you renew your insurance once it gets expired.

 Death Benefits: As third-party insurance is mandatory, the motor insurance can benefit the survivors when an
accident results in death.

 No Claim Bonus: If you have not made any claims during the policy term, you are eligible for No Claim Bonus upon
renewal of the policy. However, you may need to fulfil certain terms and conditions.
Types of Motor Insurance in India
Private Car Insurance Policy
This is motor insurance that needs to be taken for any
private car owned by an individual and is mandated by the
Government of India. It covers the vehicle for damages
against accidents, fire, natural disasters, theft among others
and also covers for any injury to the owner. It also covers
any damages and injuries caused to the third party.

Two-Wheeler Insurance Policy

This insurance policy covers two-wheelers like a scooter
or a bike and is mandated by the Government of India.
The two-wheeler is covered against damages from
accidents, disasters, fire, theft, etc. as well as any damages
and injuries to the third-party. It also offers a mandatory
personal accident cover for the owner rider and can be
taken for passengers too.
Commercial Vehicle Insurance
This insurance covers all vehicles that are not used for
personal use. his type of insurance covers all those vehicles
which are not used for personal purpose. Trucks, buses, heavy
commercial vehicles, light commercial vehicles, multi-utility
vehicles, agricultural vehicles, taxi/cab, ambulances, auto-
rickshaw etc. are some vehicles that are covered under this
insurance.

Third-Party
Third-party insurance is one of the most common types of vehicle
insurance; in which only damages & losses caused to a third-party
person, vehicle or property are covered.

Comprehensive
Comprehensive insurance is one of the most valuable
types of vehicle insurance that covers both third-party
liabilities and damages to your own vehicle as well.
Best Car insurance providers
1. New India Car Insurance
New India Insurance Co. Ltd. was incorporated on 23rd July 1919; established by the House of Tata founder member, Sir Dorab Tata. New
India Assurance is offering a wide range of effective and helpful motor insurance products that will cover all of your basic needs. It
includes all those features that a Motor insurance plan should have. Under this plan, you will get two types of coverage, Liability and
package coverage. Both will assist you in their ways.
2. TATA AIG Car Insurance
Tata AIG General Insurance Company Limited (Tata AIG General) is a joint venture between Tata Group and American International
Group, Inc. (AIG). Tata AIG Motor Insurance plan takes into consideration the conventional risks as well as non-conventional risks
associated with automobiles. It ensures that the policyholders are able to put their minds at rest and in case of emergencies get immediate
assistance.
3. Bajaj Allianz Car Insurance
When it comes to something as crucial as car insurance and car insurance renewal policy, Bajaj Allianz Car Insurance is
trusted by millions. The company enables its policyholders to renew their car insurance quickly and conveniently.

4. HDFC ERGO Car Insurance

HDFC ERGO General Insurance Company Ltd. is a collaboration between HDFC Ltd. and ERGO International AG, the primary
insurance entity of Munich Re Group. The organization offers a complete range of general insurance products right from Motor, Health,
Travel and Home to Personal Accident in the retail space.
Fire Insurance
The term fire insurance refers to a form of property insurance that covers
damage and losses caused by fire. Most policies come with some form of fire
protection, but homeowners may be able to purchase additional coverage in
case their property is lost or damaged because of fire. Purchasing additional
fire coverage helps to cover the cost of replacement, repair, or reconstruction
of property above the limit set by the property insurance policy.

KEY TAKEAWAYS
• Fire insurance is property insurance that provides additional coverage for
loss or damage to a structure damaged or destroyed in a fire.
• Fire insurance may be capped at a rate that is less than the cost of the
losses accrued, necessitating a separate fire insurance policy.
• The policy pays the policyholder back on either a replacement-cost basis
or an actual cash value basis for damages.
• Although some homeowners insurance policies include fire coverage, they
may not be extensive enough for some homeowners.
Advantages of Fire Insurance

 The biggest advantage of fire insurance is that it provides peace of mind to the policyholder.

 In case of any accident, the fire insurance will provide financial coverage for the damage.

 This financial coverage can help the owner restructure and revive the property in a new way.

 Another benefit of fire insurance is compliance.

 It helps the property owner take all precautions against the fire and make the property more secure from
any fire-related accidents.

 In short, fire insurance increases fire-related awareness among the property owner.
Fire Insurance Types
Valued Policy
This is a fire insurance policy in which an agreement is framed and the insurer undertakes to pay in the event of
destruction of property by fire.
Specific Policy
This is a fire insurance policy which insures a risk for a specific amount. In case of any loss under this policy, the insurer
pays all the loss provided. It is not more than the sum specified in the policy. Thus, the value of the property is not
considered for this purpose.
Average Policy
This is a fire insurance policy that is insured if the property is under-insured, i.e; insured for a sum smaller than the value
of the property. The insurer must bear only the proportion of the actual loss which the sum assured bears to the actual
value of the property at the time of loss.
Floating policy
This type of fire insurance policy covers several types of goods lying at various locations for one amount and one
premium. The premium normally charged under this policy is the average of the premia that would have been paid if each
batch of the goods had been insured under the specific policy for specific sums.
Blanket Policy
A blanket policy is that which covers all assets, fixed as well as current, under one policy.
Comprehensive Policy
An insurance policy which covers risks such as fire, flood, riots, strikes, burglary etc. , up to a certain specified amount is
known as a comprehensive policy.
Consequential Loss Policy
The objective of this insurance policy is to indemnify the insured against the loss or profit caused by any interruption of
business due to fire. It is also known as loss of profit policy.
Reinstatement Policy
It is a policy under which the insurer pays the amount which is sufficient to reinstate assets or property destroyed.
Open Declaration Policy
It is a policy where the insured makes a deposit with the insurer and declares the value of the subject. Risk of such nature
is covered. Such policies are normally taken where the value of stocks etc. , fluctuates significantly.
Excess Policy
When the stock of the insured fluctuates, the insured can take a policy for an amount below the amount in which his
stocks do not normally fall under. In this instance, the insured might have to take another insurance policy to cover the
maximum amount of stocks which might reach sometimes. The former type of policy is called First Loss Policy and the
latter is called Excess Policy.
FIRE INSURANCE POLICIES (BY NIC)
NATIONAL BHARAT SOOKSHMA UDYAM SURAKSHA POLICY
This policy is meant for enterprises where the total value at risk across all insurable asset classes at one
location does not exceed ₹ 5 Crore (Rupees Five Crore) at the policy commencement date.
NATIONAL BHARAT LAGHU UDYAM SURAKSHA POLICY
This policy is for enterprises where the total value at risk across all insurable asset classes at one location
exceeds ₹ 5 Crore (Rupees Five Crore) but does not exceed ₹50 Crore (Rupees Fifty Crore) at the policy
commencement date.
NATIONAL BHARAT GRIHA RAKSHA POLICY
Only policy to be offered for Dwellings both for Individual & Society/corporate (Building and / or Contents)
covering Fire and Allied Perils. Provides insurance cover for Your Home Building, and/or Home Contents.
Standard Fire and Special perils Policy (SFSP)
Buying a house or setting up a business is a dream of Individuals. But have we ensured that the huge
investments made is protected with adequate insurance. There is always a chance of these precious
investments being damaged by unfortunate and unexpected events like fire, explosions, natural calamities or
riots, etc. NIC’s SFSP policy is a comprehensive policy available at low cost to indemnify the financial loss in the
event of damage to buildings and contents within.
ALMOST EVERY INSURACE COMPANY PROVIDES FIRE INSURANCE WITH SIMILAR BENEFITS
Marine Insurance
Marine insurance refers to a contract of indemnity. It is an assurance that the goods dispatched from the country of origin
to the land of destination are insured. Marine insurance covers the loss/damage of ships, cargo, terminals, and includes
any other means of transport by which goods are transferred, acquired, or held between the points of origin and the final
destination. The term originated when parties began to ship goods via sea. Despite what the name implies, marine
insurance applies to all modes of transportation of goods. For instance, when goods are shipped by air, the insurance is
known as the contract of marine cargo insurance.

Advantages of Marine Insurance:

• Marine Insurance provides overall coverage against a wide range of risk

measures.
• It helps in the smooth functioning of trade activities as business can be
carried out without worries about losses in case of mishaps
• It provides financial stability to the concerned party
• It covers costs such as damage of goods, labor costs, legal charges, natural
risks, accidental situations, and more.
Types of Marine Insurance
Freight Insurance
In freight insurance, for example, if the goods are damaged in transit, the operator would lose freight receivables & so the insurance will
be provided on compensation for loss of freight.
Liability Insurance
Marine Liability insurance is where compensation is bought to provide any liability occurring on account of a ship crashing or colliding.
Hull Insurance
Hull Insurance covers the hull & torso of the transportation vehicle. It covers the transportation against damages and accidents.
Marine Cargo Insurance
Marine cargo policy refers to the insurance of goods dispatched from the country of origin to the country of destination.

Types of Marine Insurance policies

• Floating Policy - provides insurance cover against all shipments made during the agreed period
• Voyage Policy - specific policy for a single lot or consignment only
• Time Policy - marine insurance is generally issued for a year’s period
• Mixed Policy - mixture of two policies i.e Voyage policy and Time policy
• Named Policy - name of ship is mentioned in the insurance document, stating the policy issued is in the name of the ship
• Port Risk Policy - ensure the safety of the ship when it is stationed in a port
• Fleet Policy - Several ships belonging to the company/owner are covered under one policy. Policy is a time based policy.
• Single Vessel Policy - only one vessel is covered under marine insurance policy
• Blanket Policy - the owner has to pay the maximum protection amount at the time of buying the policy
BEST MARINE INSURANCE POLICIES
HDFC ERGO’s Marine Cargo Insurance not only provides the best protection for your cargo but also understands the
importance of swift response and efficient service in handling your claims. Catering to both importers’ and exporters’
needs, the coverage is comprehensive and flexible with international shipments protected from the time the goods leave
the seller’s warehouse until they reach the Buyer’s warehouse. The party usually responsible for insuring the goods is
determined by the sales contract. To help you familiarize yourself with the Buyer’s and seller’s responsibilities, HDFC
ERGO can extend its experience in respect of the most common sales contracts, i.e. ex-Works, Free on Board(FOB), Cost
and Freight (CFR) and Cost Insurance and Freight (CIF).

NIC Marine Insurance – Open Cover

1) The open cover is a contract for 12 (twelve) months which gives the Insured continuous protection to cover large
number of shipments / dispatches and the premium of which would be adjusted from the respective cash deposit account
maintained by the Insured.
2) The open cover is not having any Sum Insured but issued with SCL / PBL along with Terms of Cover etc.
3) An open cover is not a policy and therefore not stamped.
NIC Marine Insurance – Specific Policy
1) This type of policy covers specific goods for a specified voyage / journey
2) The Cargo, its value, the name of the Ship / Conveyance, port of loading and discharge are all known and the risks are
well defined.
THANKYOU!