What is Life Insurance? - howmanytypesofinsurance

Life Insurance - Meaning

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. Here, at ICICI Prudential Life Insurance, you pay premiums for a specific term and in return, we 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.

There are two basic types of life insurance plans -

1. Pure Protection
2. Protection and Savings

What is Pure Protection Plan?
A Pure Protection plan is designed to secure your family’s future by providing a lump sum amount, in your absence.

What is Protection and Savings Plan?
A Protection and Savings plan is a financial tool that helps you plan for your long-term goals like purchasing a home, funding your children’s education, and more, while offering the benefits of a Life Cover.

Click here to know more about different types of Life Insurance Plans.
Factors that affect life insurance premium
Now that you know what is life insurance and why you need it, find out the factors that can affect the life insurance premium:

Age: One of the prime factors that affect the premium for a life insurance plan is your age. The life insurance premium is lower for younger people and gradually increases with age

Gender: Studies have shown women live longer than men1. Therefore, the life insurance premium is lower for women as compared to men

Health conditions: Your present and past health conditions can determine the premium for your life insurance plan. If you have any pre-existing illnesses or have suffered from an illness in the past that may resurface or affect your present health, you would be charged a higher premium

Family health history: The chances of suffering from a disease that runs in your family are considerably high. So, if any hereditary illnesses run in your family, you may have to pay a higher premium

Smoking and drinking alcohol: Lifestyle habits like smoking and drinking alcohol can impact your health and lead to multiple health issues. Therefore, insurance companies charge a high premium for individuals who smoke or drink alcohol

Type of coverage: The type of coverage you opt for can increase or decrease the life insurance plan’s premium. If you add any riders to your plan, the premium would increase. A longer policy term can also result in a higher premium compared to a shorter term. In addition to this, the type of life insurance plan you select also impacts the premium. For instance, term life insurance is the most affordable form of life insurance Amount of coverage: A higher sum assured would result in a higher premium and vice versa

Occupation: If you work in a high-risk job, the premium for your life insurance plan would be higher than others. For example, if you work in construction or if your job puts you at any kind of risk, such as regular exposure to chemicals, the insurance company will charge a higher premium

Let us understand some 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, howmanytypesofinsurance).
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.
Let us understand how Life Insurance works:
In today's era, having a life insurance policy is a must for every individual as it is one of the best ways to secure one's future along with their loved ones. There are many different types of life insurance policies available in the market. However, before choosing one, it is important to understand how a life insurance policy works. Let us look at an example to understand how life insurance works:

Now, let’s see an example:
Mr. Rehan (Life Assured) pays Prudential Life Insurance (Insurer) an annual amount (Premium) over 5 years (Premium Payment Term) to make sure that his wife (Nominee) gets a certain assured sum of money (Life Cover) in case of an unfortunate event during the 10 years or Lumpsum amount at maturity on survival at the end of policy term.

Life insurance not only covers the risk arising due to an unfortunate event, but also gives you additional benefits like tax benefits, savings and wealth creation over a period of time. The right life insurance plan from a trusted company can help one get long-term risk cover plus savings, i.e. dual benefits from one solution.

FAQS:

1. Is life insurance worth buying?
Yes, life insurance is a worthy purchase. Anybody with financial dependents will find the benefits of buying life insurance attractive. In case of the demise of the only income earner, a life insurance policy becomes a financial safety net that helps your loved ones pay for expenses such as a loan, childcare, education, health, and many other everyday bills. Life insurance is an affordable way to financially protect the people you love most.

2. How to claim life insurance after death?
It is a simple process. You can report your claims online, at our branches, central office, via SMS, e-mail or through our call center as per your convenience. Physical documents will be required to be sent to the nearest branch to start the process. The documents needed are:
Claimant's statement form
For Lender Borrower Group (only for Credit Life policies) - claimant's statement / claim intimation form
For Affinity / Employer-Employee Group - claimant's statement / claim intimation form
Original Policy Document
Copy of death certificate issued by Local Municipal Authority
Copy of claimant's photo identification proof and current address proof - List of Photo ID and Current Address Proof
Cancelled cheque/ Copy of bank passbook
Copy of medico legal cause of death certificate
Medical records (admission notes, discharge/ death summary, indoor case papers, test reports, etc.)
Prior medical records of insured/ Life assured
Medical attendant's/ hospital certificate issued by doctor
Certificate from employer (for salaried individuals)
In addition, below Documents required for Accidental/ Suicidal Death
Post Mortem Report and chemical viscera report
FIR/ Panchnama/ Inquest Report and final investigation report
Copy of driving license if Life Assured was driving the vehicle at the time of accident (applicable if 'Accident and Disability Benefit Rider' is opted)

Next, our claims department/team will assess the claim and inform in case any further documents need to be submitted. Once your claim is intimated and the life insurance company receives all the relevant approvals and then settle all the valid claims through cheque or Electronic Clearance System (ECS)

3. How many beneficiaries can be on a life insurance policy?
There is no limit on the number of beneficiaries you can add to your policy. However, if the insured has a will and it specifies who the amount of the insurance benefit should go to after he/she passes away, then the benefit will go to the person mentioned in the will irrespective of the mentioned nominee.

Types of Life Insurance - howmanytypesofinsurance

Many different types of life insurance are available to meet all sorts of needs and preferences. Depending on the short- or long-term needs of the person to be insured, the major choice of whether to select temporary or permanent life insurance is important to consider.





Term life insurance
Term life insurance is designed to last a certain number of years, then end. You choose the term when you take out the policy. Common terms are 10, 20, or 30 years. The best term life insurance policies balance affordability with long-term financial strength.

• Decreasing term life insurance is renewable term life insurance with coverage decreasing over the life of the policy at a predetermined rate.
• Convertible term life insurance allows policyholders to convert a term policy to permanent insurance.
• Renewable term life insurance provides a quote for the year the policy is purchased. Premiums increase annually and are usually the least expensive term insurance in the beginning.

Many term life insurance policies allow you to renew the contract on an annual basis once the term is up. This is one way to extend your life insurance coverage but since the renewal rate is based on your current age, premiums can rise precipitously each year. A better solution for permanent coverage is to convert your term life insurance policy into a permanent policy. This is not an option on all term life policies; look for a convertible term policy if this is important to you.

Permanent Life Insurance
Permanent life insurance stays in force for the insured’s entire life unless the policyholder stops paying the premiums or surrenders the policy. It’s more expensive than term.

Whole life insurance is a type of permanent life insurance. It accumulates a cash value in order to last the lifetime of the insured person. Cash-value life insurance also allows the policyholder to use the cash value for many purposes, such as a source of loans or cash or to pay policy premiums.
Universal life (UL) insurance is a type of permanent life insurance with a cash value component that earns interest. Universal life features flexible premiums. Unlike term and whole life, the premiums can be adjusted over time and designed with a level death benefit or an increasing death benefit.
Indexed universal life (IUL) is a type of universal life insurance that lets the policyholder earn a fixed or equity-indexed rate of return on the cash value component.
Variable universal life (VUL) insurance allows the policyholder to invest the policy’s cash value in an available separate account. It also has flexible premiums and can be designed with a level death benefit or an increasing death benefit.

What is Health Insurance? - howmanytypesofinsurance

Health insurance is a type of insurance that covers medical expenses incurred on an illnessor injury. These medical expenses include hospitalisation expenses, medicine cost and doctor/physician fees as well.

Health insurance aims to take care of your expenses in a time of medical crisis. To put it simply, the insured pays regular premiums to the insurance provider, and in return, they offer financial support to them.

Why Do You Need Health Insurance?

Never before has it been so important to take care of your health. The Coronavirus outbreak has made that abundantly clear for all of us. However, even before the global pandemic, there were several threats to our health present in the environment, because of which we need to understand what is health insurance. You might lead a healthy lifestyle, but unfortunately, a medical emergency can occur without warning.

In times of a health crisis, the financial burden can become immensely stressful. With the skyrocketing healthcare costs, it can be challenging to pay for them out of your savings. Therefore, it is essential to plan for medical emergencies.

A health insurance plan protects you from these overwhelming medical expenses. When you understand health insurance meaning and invest in a suitable health insurance plan, it ensures that your family is financially untroubled. Make sure you are aware of various tips to consider before buying health insurance.

Benefits of Health Insurance
There are several benefits to investing in a health insurance plan next to understanding health insurance meaning. Following are the benefits of health insurance plans:

1. Optimum Coverage
2. Cashless Claim Benefit
3. Additional Protection
4. Tax Benefits

Let’s discuss the above health insurance benefits in detail.

1. Optimum Coverage
The principal reason to know what is health insurance and buy it is to create a financial shield for your future. There are several kinds of health insurance plans available to cater to specific requirements. It is crucial to understand your financial needs and choose a suitable policy.

A carefully selected plan will provide optimum coverage, including regular check-up expenses, ambulance expenses, hospitalization charges, alternative treatment, and more. Some policies also offer coverage for treatment at home under medical supervision as a part of domiciliary treatment.

Make sure you understand health insurance meaning in various facets before you choose a plan.

2. Cashless Claim Benefit
To make things easier, most insurance companies offer cashless treatment athospitals. The insurance providers have tie-ups with certain hospitals for such cases. It means that you do not have to pay medical bills directly when you avail of treatment in a network hospital.

The expenses are settled between the hospital and the insurance provider. In the case of an unforeseen medical emergency, cashless treatment can be incredibly helpful.

3. Additional Protection
Most employers provide health insurance for their employees. However, many people find it to be unsuitable to their specific requirements. It may also be affected by a change in employment. A health insurance policy of your choice will put your mind at ease. A plan that is customized to your requirements will offer better security and stability.

Furthermore, several riders can be attached to your existing plan and expand the scope of security. For example, the critical illnesses rider offers protection against life-threatening diseases such as cancer, heart attacks, kidney failure, and more.

4.Tax Benefits
One of the most significant benefits of investing in a health insurance plan is the tax benefits. Many people find it to be a substantial incentive behind opting for health policy. It is so because tax relief is a massive advantage for an individual’s ongoing expenses.

 
Tax Benefits of Health Insurance
If your annual income falls under the taxable category, health insurance can prove beneficial in more than one way. The government allows tax deductions for specific expenses that will help reduce your taxable income. A health insurance plan comes under the list of expenses eligible for tax deductions.

Under Section 80D of the Income Tax Act, you can claim a tax deduction of up to Rs. 25,000 for the self, spouse, or dependent children. If you have a health plan for your parents of less than 60 years of age, an additional deduction of up to Rs. 25,000 is applicable. In case the parents are above the age of 60, the deduction amount can be increased up to Rs. 50,000.

In case both the taxpayer and the parent are above the age of 60, this section allows a maximum deduction up to Rs. 1 Lakh. There are also taxation reliefs for preventive health check-ups between Rs. 5,000 – Rs. 7,000 for the age brackets mentioned earlier.

You can avail of the tax benefits under Section 80D and Section 80C by adding a critical illness rider with a Max Life term plan, thereby serving as a health insurance plan. You can use an online calculator to pay the premium.

Types of Health Insurance - howmanytypesofinsurance

Every individual has different requirements from their insurance plan, depending on their financial situation. Therefore, you must be exceptionally careful and thorough while investing in a health plan.

It is a critical life decision that will impact your future significantly. Consequently, it is essential to understand the types of health insurance plans available today to provide optimum coverage for yourself and your loved ones.

There are two categories of health insurance policies.

1. Indemnity Plans
2. Defined-Benefit Plans

1. Indemnity Plans
These are the traditional health insurance plans that offer coverage for your medical expenses up to the sum insured. Here are the plans that are included:
Mediclaim Insurance – This provides compensation for the hospitalization expenses that occur due to accidental stay or illnesses. It includes nursing charges, surgery expenses, oxygen, anesthesia, doctor’s fee, etc.
Individual Insurance – This is the most common type of health plan available. As the name suggests, it is meant for the insured individual only. The payable premium depends upon the insured individual’s age, medical history, and other relevant factors. You can add additional members to the plan by paying an extra premium.
Family Floater Insurance – It provides coverage for the entire family under a single premium amount. This amount is comparatively lesser than that of an individual health plan. For a family with no significant health issues, this option might be preferable. However, if there is a family member with severe health issues, they might require a sizable amount of the sum insured, which will leave other members with a lesser coverage amount.
Unit Linked Health Insurance – Commonly known as ULIPs, this plan is a combination of investment and insurance coverage. A portion of the premium amount is invested in mutual funds while the rest of it goes into securing insurance. The returns are subject to market performance.
Group Mediclaim – This is a popular choice among large and medium scale enterprises. It offers health coverage for the employees under a common plan.

2. Definite-Benefit Plans
These are the type of health plans that provide compensation for a lump sum amount when the insured is detected with an illness. Here are the plans included:

Critical Illness Plan – This plan offers a pre-determined amount of compensation upon detecting a critical illness regardless of pre or post-hospitalization charges. These critical illnesses majorly include life-threatening diseases such as cancer, multiple sclerosis, paralysis, kidney failure, stroke, paralysis, and more.
Hospital Daily Cash Benefit Plan – Under this plan, a pre-set sum assured is offered as compensation for each day of hospitalization. These plans are available as standalone covers or riders.

Personal Accident Plan – This plan provides compensation in case of an accidental injury or demise. Some Plans also cover loss of income due to a temporary permanent disability rendering a person unfit to go back to work for a few days.

How to Choose Health Insurance Plan?
While deciding to purchase a health insurance plan, there are certain things you must consider. Here’s how to choose a plan that provides maximum benefits:

You must choose the sum-insured precisely based on your age, marital status, and health condition. Inadequate coverage will defeat the purpose of a health plan and cause financial strain. It is often recommended to invest in a health plan at a younger age since the premium amount is comparatively lesser and waitig periods can be consumed during the early years when one is healthy When you purchase a health plan, there is a waiting period before the insured can claim the compensation. Since different plans have varying terms and conditions, make sure that your plan's waiting period is relatively lesser Consider the claim-settlement ratio of the insurance provider as well Make sure to look at the network list of hospitals Strengthen your plan by adding relevant riders to it Eligibility Criteria to Buy Health Insurance Principally, if you are an earning individual, it is highly recommended to invest in a health insurance plan. It is a significant financial decision that helps plan the future.

Insurance providers have specific eligibility criteria in place. Most often, this includes a medical screening of the person to be insured. It evaluates their health according to specific medical parameters to make a note of any underlying medical conditions. It enables the underwriter to arrive at a reasonable cost of the premium. It also helps in avoiding any future disputes over the insurance claim.

 
Documents Required to Buy Health Insurance
Different insurance providers require a different set of documents when buying health insurance. Here is a list of standard documents that are needed:

Age Proof – A voter ID Card, Pan Card, Aadhar Card, Passport, Driving License, or Birth Certificate.
Identity Proof – A Voter ID Card, Passport, Aadhar Card, or Driving License
Address Proof – Ration Card, Driving License, Passport, Rent agreement if applicable, PAN Card, Aadhaar Card and utility bills like electricity bill, telephone bill, etc.
Passport-size photographs (if demanded by the insurer)
Medical reports (if demanded by the insurer)
Proposal form duly filled in and signed

Frequently Asked Questions (FAQs)
Q. What is the right age to buy health insurance?
A. There is no hard and fast rule, but it is often recommended to buy a health plan at a young age. It might help you escape the waiting period or higher premium charges due to pre-existing diseases. It is also beneficial for long-term financial planning.

Q. Is there a limit on the number of claims that I can avail in one year?
A. No, there aren’t any limits on the number of claims. However, the claim amount cannot exceed the sum insured.

Q. What is a cumulative bonus?
A. In case of no claims in a year, most insurance providers offer an increase in the sum insured up to a certain percentage as a part of a cumulative bonus.

Q. What can I do if I am dissatisfied with my health policy?
A. In such a case, you can switch to an insurance provider who is more suitable to you. The IRDAI introduced this feature in 2011; however, it is essential to note that porting the policy is different from cancelling or not renewing it.

Q. Do I have to pay from my pocket despite availing a cashless claim facility?
A. Yes, certain charges are not reimbursable under the policy, such as administration/registration charges, visitor pass charges, special nursing charges, etc.

What is Auto Insurance? - howmanytypesofinsurance

Understand your car insurance and what it covers

Basic personal auto insurance is mandated by most states and provides you with some financial protection in case of an accident. But is it enough? What are the options? Learn how car insurance works and what types of coverage are available.

Understanding auto insurance—the basics
Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.

Auto insurance provides coverage for:

Property – such as damage to or theft of your car
Liability – your legal responsibility to others for bodily injury or property damage
Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses
Basic personal auto insurance is mandated by most U.S. states, and laws vary. Auto insurance coverages are priced individually (a la carte) to let you customize coverage amounts to suit your exact needs and budget.

Policies are generally issued for six-month or one-year timeframes and are renewable. The insurance company sends a notice when it’s time to renew the policy and pay your premium.

Who is covered by my auto insurance—and under what circumstances?
Your auto policy will cover you and other family members on your policy, whether driving your car or someone else’s car (with their permission). Your policy also provides coverage if someone who is not on your policy is driving your car with your consent.

Your personal auto policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. It will not provide coverage if you use your car for commercial purposes—for instance, if you deliver pizzas.

Personal auto insurance will also not provide coverage if you use your car to provide transportation to others through a ride-sharing service such as Uber or Lyft. Some auto insurers, however, are now offering supplemental insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services.

Is auto insurance coverage mandatory?
Auto insurance requirements vary from state to state. If you're financing a car, your lender may also have its own requirements. Nearly every state requires car owners to carry:

Bodily injury liability – which covers costs associated with injuries or death that you or another driver causes while driving your car.

Property damage liability – which reimburses others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.
In addition, many states require that you carry:

Medical payments or personal injury protection (PIP), which provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.
Uninsured motorist coverage reimburses you when an accident is caused by a driver who does not have auto insurance—or in the case of a hit-and-run. You can also purchase under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.

Even if PIP and uninsured motorist coverage are optional in your state, consider adding them to your policy for greater financial protection.

• Types of Auto Insurance

Types of Auto Insurance? - howmanytypesofinsurance

You may already know how auto insurance works, but do you know what the different types of car insurance are? If you’re shopping for auto coverage, knowing the different types of auto insurance and their coverages is an important step in getting the policy that’s right for you. Here are a few of the basic car insurance types, how they work and what they cover.

Liability coverage
Liability coverage is required in most US states as a legal requirement to drive a car. Liability insurance may help cover damages for injuries and property damage to others for which you become legally responsible resulting from a covered accident.

Collision insurance
Collision insurance may cover damage to your car after an accident involving another vehicle and may help to repair or replace a covered vehicle.

Comprehensive insurance
Comprehensive insurance can provide an extra level of coverage in the instance of an accident involving another vehicle. It may help pay for damage to your car due to incidents besides collisions, including vandalism, certain weather events and accidents with animals.

Uninsured motorist insurance
Uninsured motorist insurance can protect you and your car against uninsured drivers and hit-and-run accidents. This coverage is often paired with underinsured motorist insurance.

Underinsured motorist insurance
Many drivers choose to carry the minimum in liability coverage to save money, but this might not provide enough coverage. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance is not enough to cover the costs.

Medical payments coverage
Medical costs following an accident can be very expensive. Medical payments coverage can help pay medical costs related to a covered accident, regardless of who is at fault.

Personal injury protection insurance
Personal injury protection insurance may cover certain medical expenses and loss of income resulting from a covered accident. Depending on the limits of a policy, personal injury protection could cover as much as 80% of medical and other expenses stemming from a covered accident.

Gap insurance
Car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a loan. Gap insurance may help certain drivers cover the amount owed on a car loan after a total loss or theft.

Towing and labor insurance
Available if you already have comprehensive car insurance, towing and labor insurance may reimburse you for a tow and for the labor costs to repair your vehicle.

Rental reimbursement insurance
Figuring out how to get around after an accident can be expensive. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.

Classic car insurance
Classic car insurance provides specialized coverage designed for the unique needs of vintage and classic car collectors. Find out if classic car insurance is right for you.

If you don’t currently have auto insurance, it’s crucial to get coverage as soon as possible. Get a free quote for the types of car insurance listed above so you're protected from the unexpected.