Insurance: Its Importance and Benefits

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Insurance: Its Importance and Benefits

What is an Insurance

Life is unpredictable. Aren’t we all surrounded by the risk of death, destruction, or disability? The happening of any of these causes financial loss. To be on the safe side, an individual decides to transfer such risk to an insurance company.

Insurance, in simple language, is when two parties enter into a legal agreement.

These two parties are:

  1. The Insurer (The insurance Company)
  2. The Insured (An individual who approaches the insurance company for insurance)
What is insurance

As per the agreement, in case of an insured emergency, an insurance company promises to make good the losses of the insured. The contingency is a sudden event that causes losses. Such loss may be the death of the insurance policyholder or damage/destruction of the property. An individual who is willing to get insured is required to pay a premium in return for the promise made by the insurer.

The insurer and the insured make a legal contract for insurance, which is known as ‘The Insurance Policy.’ The insurance policy has details about every aspect, including the circumstance and conditions under which the insured person or the nominees will be paid out the insured amount by the insurance company.

With an insurance policy, you can now protect yourself and your family from suffering financial loss. Normally, the premium for a big insurance cover is much lesser. The insurance company takes a risk and provides a high cover for a small premium as there are very few cases in which insured people end up claiming the insurance. That is the reason why one can get insurance for a big amount at an affordable price.

Any individual willing to seek insurance can approach an insurance company and apply by following the procedural guidelines of the insurance company. However, the final decision always lies with an insurance company and will be taken after evaluating the claim application thoroughly.

It is not a compulsion on the part of insurance companies to accept every application. Insurance companies exercise the right to deny insurance to high-risk applicants.

Let’s understand different kinds of insurance in India in brief.

  • Life Insurance
life insurance

Life insurance is obviously about the insurance of your life. It makes sure that those dependent on the insured are financially secure in the event of an untimely demise of the insured. If you happen to be the sole provider of the family, life insurance is a must for you. The insurance company financially compensates the family of the policyholder if the insured gets expired during the term of the policy.

  • Health Insurance
Health insurance

Health insurance aims to cover medical costs for expensive treatments over an array of diseases and ailments. You may either go for a general health insurance policy or a policy that covers specific diseases. The premium paid towards a health insurance policy is usually used in covering expenses on hospitalization, medical costs, and treatment.

  • Home Insurance
Home Insurance

Home insurance aims to cover loss or damage caused to your home due to accidents like fire, natural calamities, or perils, like, lightning, earthquakes, etc.

  • Car Insurance
car insurance

Car insurance is essential for every car owner to protect you against unanticipated incidents like accidents. Some of the insurance policies cover damages caused due to floods or earthquakes along with third-party liability where you have to pay damages to other vehicle owners.

  • Education Insurance
Education Insurance

Designed as a saving tool, education insurance is a savior in today’s times. It is a great way to provide a collective amount to your child when he/she is ready to go to college. This fund can be utilized to pay for the higher education of young children.

What is the Importance of Insurance

  • Safety and Security:

You feel safe and secure once the insurance reduces uncertainties in your business and human life. Insurance provides financial support, safety, and security against sudden unanticipated events. Once insured, you don’t have to live in a fear of contingent losses. The life insurance policy covers financial assistance provided to the family in case of the death of the insured. In the case of other types of insurance, security is provided against the loss due to accidents, fire, etc.

  • Encourages Savings:
Encourages Savings

Insurance policy not just protects against uncertainties and risks, but provides another opportunity to channelize your money. Life insurance is a systematic saving created due to payment of regular premium. It would not be wrong to say that an insurance policy is another investment channel and inculcates the habit of saving money. The insured gets the lump sum amount at the time of maturity of the contract.

  • Economic Growth:

Insurance helps one mobilize domestic savings. This leads to a significant impact on the economy. This collective amount or accumulated capital can be turned into productive investments, which lessens the gravity of financial loss, leads to financial stability, promotes trade and commerce activities that eventually help the economy to grow and develop.

  • Provides Medical Support:
Provides Medical Support

With medical insurance, the worry of managing risks related to health is over. Anyone can suffer due to ill health or clinical illness. The larger section of the society finds it difficult to afford medical expenses. Medical insurance policy offers some cover for different types of health risks. The insured is assured to get medical support as per the medical insurance policy.

  • The Distribution and Spreading of Risk:

The cardinal principle of insurance is to spread risk among a large number of people. A large number of persons get insurance policies and pay a premium to the insurer, so on the happening of any loss, compensation is made out of funds of the insurer. The insurance facilitates the spread of risk from the insured to the insurer.

  • Capital Formation:

Large funds can be generated by way of insurance premiums. These funds are further utilized in the development of the country. This further leads to the acceleration of economic growth. Employment opportunities can be increased with the help of big investments. This is how insurance forms an important source of capital formation.

  • Financial Resources:
Financial Resources

The pool of financial resources can be generated by collecting premiums. These funds are invested in Govt. Securities, stocks, etc. The systematic and careful deployment of these funds further leads to boost the economy.

How to Get an Insurance

how to get insurance

Credit Bazaar assists in choosing different kinds of insurance, which can be broadly categorized into three types.

  1. Life Insurance
  2. General Insurance
  3. Health Insurance

Under the Life Insurance category, Credit Bazaar provides:

Under the ‘General Insurance’, Credit Bazaar Provides:

Under the ‘Health Insurance, Credit Bazaar provides:

All you have to do is to click on the respective insurance scheme, you wish to apply and inquire for and proceed to fill up details as provided on the website of Our team of expert professionals will always be ready to search for the best insurance policy depending upon your requirement.

What are the Benefits of Having Life Insurance

  • Covers Risk of Life:
Covers Risk of Life

In these volatile times, you don’t have to worry about those dependent upon you. Life insurance is a way of making sure that your family is supported financially in case of any mishap. It gives you peace of mind as your family will not suffer in case of any unexpected accident due to the demise of the insured, in the future. Life insurance safeguards the interests of those people whose incomes are diminishing as they are growing, retired people, or people who are prone to accidents. You always have an option to choose the policy that suits your requirements best from the available ones.

  • Returns on Investment:

Most insurance companies have come up with policies that provide bonuses. Money invested in insurance policies is safe and helps cover future risks. The money invested will earn good returns on completion of terms or with the demise of the insured. Either way, the money invested is safe and ensures safely paid returns.

  • Offers Tax Benefits:
Offers Tax Benefits

Per Section 80C of the Income Tax Act, one may reduce the tax liability. This section enables rebates on certain specified rebates. The best option is to invest in insurance premiums, employee provident funds, Pension superannuation funds, equity-linked mutual funds, public provident funds, and national savings certificates. The amount deducted is eligible for deduction from gross taxable income.

  • Life Planning:

An insurance policy enables you to plan your life according to convenience. Your financial goals can be achieved with the help of the systematic allocation of money. The life insurance premium is a long-term investment as well as a financial security against a loss of life. The timely decision about investment in insurance helps you plan your future, dream home, your children’s education, their marriage, etc. This sets you for a relaxed retired life.

  • Income Benefits Assured:
income benefits

The assured income that a family receives regularly a family stays secured. With this amount, you can pay rent, electricity bills, telephone bills, education of their children, etc. Life insurance ensures the compensation of income in the absence of the deceased insured member of the family.

  • Additional Benefits:

The additional benefit that comes with an insurance policy is termed as ‘Rider’. The Rider allows you to increase your insurance coverage. Rider provides more comprehensive protection by covering risks that are beyond the scope of the main policy. The Rider may cover critical illness, family income benefit, personal accident, and waiver of premium benefit. This added advantage comes to the rescue when the losses are beyond the purview of the main policy. You get an additional tax benefit and make you eligible for deduction under various sections of the Income Tax Act.

How can We Help you Get a Life Insurance

How we can help you

With the assistance of a credit bazaar, it is very easy to get the best insurance policy that suits your needs and convenience.

You can’t guarantee a risk-free life. You can always choose to focus on things under your control and your anxiety vanishes instantly. So you must decide and choose insurance as a way to deal with unanticipated incidents that may have to come across in the future.

With Credit Bazaar ready to provide you all the guidance you need, you no longer have to spend time exploring all options to find out the one that suits your requirements. You can simply rely on our team to find out what suits your requirements the best. With the Credit Bazaar at the beck and call, you don’t have to worry about your decision going wrong. We have helped many of our clients take prompt financial decisions and guided them on many matters that have resulted in helping them with financial planning.

Apart from insurance matters, you may always approach Credit Bazaar for matters related to Credit Cards, Personal Loans, Business Loans, Bazaar Improvement plans, Corporate Health Plans, Loan against property, Home loans, Mutual funds, etc. Want to check your credit scores for free? You can avail of this facility by logging in to the Credit Bazaar has also helped many businesses and individuals in improving credit scores.

As discussed above, one can plan their financial decisions and manage their finances efficiently with the proper investment in insurance plans. One can survive only with long-term financial goals.

Those who have not paid attention to their finances have ended up in a huge mess beyond repair. Approach ‘Credit Bazaar before it’s too late.

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