Insurance can be defined as a system of exchange under contract where payments over a period of time (premiums) entitle individuals compensation by an organization (insurance company) in the event of loss due to pre-specified conditions resulting from natural calamities like fire, flood, earthquake, accidents etc. It offers you the ability to plan for unforeseen events that could affect your family's financial problem adversely.
Insurance can be divided into two broad categories - life and non life insurance (General Insurance). Around 20 companies are providing life Insurance Policies in India such as the Life Insurance Corporation of India (LIC) which is a government undertaking and several private insurance companies such as Birla Sunlife, ICICI Prudential life Insurance Co.Pvt Ltd., Metlife India Co. Pvt Ltd., ING Vyasa Life Insurance etc to name a few. General Insurance or Non Life Insurance companies will give you guarantee for your Health, house and valuables and protect them against all unpredictable risks. General Insurance Corporation of India and its subsidiaries like United India Insurance, Oriental Insurance, the National Insurance Company, New India Assurance etc and other private companies cater to the general insurance sector. Taking policies from these Insurance companies are safe because, all the companies come under the Insurance Regulatory and Development Authority (IRDA) which is established to regulate, promote and ensure orderly growth of Life and General insurance industry. Wide powers have been given to IRDA for effective performance.
Throughout our living existence, we are faced by numerous risks - failing health, financial losses, accidents and even death. Insurance focuses on all these uncertainties on financial terms. They provide us with compensation in times of need. It is also a way to promote savings. The government also has provided certain benefits through the Income Tax Act for tax payers if they choose to opt for life insurance policies. Many Insurance schemes are exempt from tax.
How to Buy
All Insurance company provides Agents. It is advisable to find out a reliable agent who is known to you. Get all the details from him and try to clear all your doubts. A good agent will help you to select the better option, which is suitable for both your needs and your income, from the various schemes provided by the insurance companies.