What Is Insurance?
Insurance is a financial protection mechanism designed to shield individuals and businesses from unexpected financial losses by transferring risk to an insurer through premiums.
In simple terms, insurance transfers risk from you to the insurer — helping you recover financially when something goes wrong.
Types of Insurance and Their Coverage
Health Insurance
Health insurance covers medical expenses for illnesses, surgeries, or hospitalizations, often offering cashless treatment at network hospitals or reimbursement options, including room rent, doctor and surgeon fees, medications, diagnostic tests, and pre/post-hospitalization expenses with possible maternity, critical illness, and daycare coverage.
Life Insurance
Life insurance provides financial security to your family in the event of your death through plans like Term, Whole Life, Endowment, and ULIPs, paying the sum assured to the nominee if the insured passes away during the policy term.
Motor Insurance
Motor insurance protects vehicles against accidents, theft, and disasters via mandatory third‑party liability and comprehensive coverage, with add‑ons like zero depreciation, personal accident cover, engine protection, and roadside assistance.
Home and Property Insurance
Home and property insurance safeguards structures and contents from fire, theft, earthquakes, floods, and more, often including liability coverage for injuries on the property.
Travel Insurance
Travel insurance covers medical emergencies, trip cancellations, lost luggage, passport loss, and delays, with options for evacuation, COVID‑19 treatment, and accidental death benefits.
Personal Accident Insurance
Personal accident insurance offers compensation for accidental injury, disability, or death, covering accidental death, permanent/partial disability, and temporary income loss.
Business or Commercial Insurance
Business insurance protects companies from losses due to fire, theft, disasters, or liability, including property insurance, professional indemnity, liability, and business interruption coverage.
Cyber Insurance
Cyber insurance protects against data breaches, identity theft, ransomware, and cyberattacks, covering data recovery, legal fees, and reputation management.
Pet Insurance
Pet insurance helps cover veterinary bills, surgeries, treatments, and medications, with some policies including third‑party liability for injuries or damage caused by pets.
Understanding Insurance Premiums
An insurance premium is the amount you pay periodically to keep coverage active, and it depends on personal factors (age, health, occupation, lifestyle), policy factors (type, sum assured/insured, term, riders), and risk assessment (medical history, claims, driving record, location).
Pay on time to avoid lapses; a grace period of 15–30 days typically applies, after which the policy may lapse and coverage ends if unpaid.
Key Insurance Terms
Sum Assured: The guaranteed amount paid to your nominee in life insurance upon death during the term.
Sum Insured: The maximum claimable amount in health, motor, and home insurance beyond which the insurer won’t pay.
Deductible: The out‑of‑pocket amount you pay before insurance starts paying the rest of a claim.
Waiting Period: The time after purchase during which certain benefits can’t be claimed, e.g., initial 30–90 days or 2–4 years for pre‑existing conditions.
Policy Exclusions: Situations not covered, such as cosmetic procedures, certain pre‑existing conditions initially, specific early life‑insurance exclusions, or intentional damages.
Cashless Claims: Direct settlement at network hospitals after pre‑authorization, with no upfront payment by you.
Reimbursement Claims: You pay first, then submit documents for repayment within the insurer’s timeline.
How to File Insurance Claims
Step 1: Report Immediately. Notify your insurer promptly per product timelines (e.g., 24–48 hours for admissions/accidents) via phone, app, site, or branch with your policy details.
Step 2: Gather Documents. Collect required forms and proofs (health: discharge, bills, reports; life: policy, death certificate, nominee KYC; motor: policy, RC, FIR, photos, estimates; property: proofs of loss and ownership).
Step 3: Complete Claim Form. Fill accurately, match documents, and sign where required to avoid delays.
Step 4: Submit Your Claim. Prefer online submission for speed; keep copies and a reference number.
Step 5: Cooperate During Investigation. Provide information, allow inspections, and preserve evidence until assessment completes.
Step 6: Track Status. Monitor via portal/app or support every 5–7 days until resolution.
Step 7: Receive Settlement. Approved claims are paid by transfer or cheque; reimbursement is net of deductibles while cashless is paid directly to the provider.
Frequently Asked Questions (FAQ)
Q1: Difference between insurance and warranty? Insurance protects against unexpected losses; warranty covers manufacturing defects within a set period.
Q2: Multiple policies for the same coverage? Yes, but claims follow indemnity — you can’t profit beyond actual loss.
Q3: What happens during renewal? Pay within the grace period to keep benefits and waiting periods intact.
Q4: Is insurance mandatory? Motor insurance is legally mandatory; health and life are recommended, with many employers offering group health.
Q5: Can I claim for pre‑existing conditions? Yes, after completing the policy’s specified waiting period and full disclosure at purchase.