What is General Insurance?
Simply put, all insurance products not classified as life insurance products are general insurance products. There are a variety of general insurance products ranging from health to property, and everything in between. These branches of insurance come under the term ‘general insurance.’
Still, wondering what is general insurance? Don’t worry. This article will discuss the following aspects of general insurance and clear all your doubts:
- General Insurance Types
- General Insurance Features
- General Insurance Example
- General Insurance vs Life Insurance
General insurance Types
There are a variety of general insurance products available on the market today. Let us discuss some of the most important ones:
- Health insurance: A health insurance policy protects the insured against any unforeseen health complications. Hospitalization charges are borne by the insurance company.
- Motor insurance: A motor insurance policy protects the insured against motor accidents. Both, third-party and comprehensive motor insurance policies are available in the market.
- Property insurance: A property insurance policy protects your home or factor against theft, terrorism, acts of nature, etc.
- Marine insurance: Marine insurance protects a trader’s cargo or vessel against risks of the sea.
- Travel insurance: Travel insurance protects the insured against the costs of hospitalizations abroad.
- Accident insurance: An accident insurance policy insures the policyholder against damages caused due to an accident.
- Aviation insurance: Aviation insurance protects an aircraft against risks of the air.
- Crop insurance: Crop insurance protects the farmer’s crops against drought, floods, acts of nature, etc.
General Insurance Features
Top 5 features of general insurance include:
- Peace of mind: A policyholder will have peace of mind knowing he is covered against various uncertainties of life.
- Financial stability: A general insurance policy can many a time provide great financial stability to a policyholder and his family.
- Wide coverage: Today’s insurance companies provide an option to widen your insurance coverage by additional premium. The wider the coverage, the higher the protection.
- Savings: There are various general insurance plans like ULIP, money back plans, etc, that provide the policyholder will additional savings benefits.
- Tax benefits: There are various IT deductions available to policyholders under the Indian IT Act. Individuals can avail of these deductions and lower their tax liability.
General Insurance Examples
Still, confused? Let us provide 2 simple examples of general insurance to clear your doubts.
- Health insurance example: Let us say, Mr. Ajit buys a health cover with an insurance company with coverage of Rs 5 Lakhs. Now, Mr. Ajit has met with a minor accident and requires hospitalization. Upon discharge, he makes a claim with the health insurance company to pay his hospitalization bills. The insurance company does its due diligence and disburses the funds to Mr. Ajit.
- Motor insurance example: Let us say, Mr. Roy has bought a motor insurance policy for his new Honda City. After a few months of the purchase, his vehicle meets with an accident. Mr. Roy intimates the insurance company and files a claim. The insurance company disburses the funds to repair his car if all documentations are in order.
General Insurance Vs Life Insurance
General insurance comprises of all insurance products that are non-life in nature.
Life insurance products are products that provide coverage against the policyholder’s life.
Motor insurance, health insurance, home insurance, marine insurance, etc.
Term insurance, whole life insurance, ULIP, etc.
Not an indemnified contract
Generally, no savings component.
Savings components are available in these type of plans.
Claims are paid on the occurrence of an event.
Claims can be paid at the occurrence of an event or maturity.