Thursday, June 30, 2011


Life is full of twists and turns. There can not be anything certain in life. You can try and plan your life but unexpected things happen and then you find yourself in trouble. So the Insurance policies are a safeguard against the uncertainties of life. Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event.
Insurance is actually a contract between the insurance company, and the person seeking the insurance cover. Within this contract, the insurer agrees to pay the insurer for financial losses arising out of any unforeseen events or risk in return for a regular payment of premium. Thus, these insurance plans are also called as a Risk Cover Plans, which means to financially compensate for losses that occur uncertainly through accident, illness, theft, natural disaster.
Insurance is also a very good option for investment. Remember that first and foremost, insurance is about risk cover and protection. By buying life insurance, you are actually buying peace of mind. But at the same time Insurance also serves as an excellent tax saving mechanism. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Insurance policies cover the risk of life as well as other assets and valuables, such as, home, automobiles, jewelry et al. On the basis of the risk they cover, insurance policies can be classified into two categories: Life Insurance and General Insurance. As the term suggests, Life Insurance covers the risk involved in a person's life, while General Insurance provides financial protection against unforeseen events, like accident, flood, earthquake, disease, etc.

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