As you saw in the example in the previous chapter, Subhash had invested in life insurance for his father. But this isn’t the only example of Subhash being smart about personal finance. A few months back, there was a huge fire in Subhash’s house. The damage was very less, but it took Subhash a lot of money to repair that damage. Subhash had already invested in home insurance because of his awareness. And this insurance saved his family from a huge expense, which if seen could prove to be a huge financial burden and loss.
This home insurance that Subhash has bought comes under the category of general insurance. What is general insurance? And what are the different types of covers that come in? In this chapter we will learn about them.
What is general insurance?
Just like we insure our life, we can also insure our other things like house, car, health etc. There is only one word for all this – general insurance. It is also known as non-life insurance. General insurance is a type of protection cover taken for things other than life.
Here too, there is a legal contract between the insurer and the insured. And here also the policyholder has to pay the premium to the insurance company.
Why is general insurance needed?
What is general insurance? And why is it needed? In simple words, general insurance protects you from many other mishaps and misfortunes, in which your life may not suffer but many different types of financial or non-financial troubles arise in front of you. Many types of accidents can happen in our life, and it can also be said that these accidents are different types of general insurance.
What are the Different Types of General Insurance?
In general insurance, insurance can be done for many types of incidents. It can be of many different types. Here are five common types of general insurance coverage:
Health related problems keep happening in life. As people grow old, there are many diseases in the body like diabetes, heart disease, arthritis etc. The younger generation is also more likely to be hospitalized due to diseases or accidents. And usually the medical bills are also very high. And here’s where health insurance can help you.
What is covered in a health insurance plan may vary from insurer to insurer. But if seen, some of these things are covered in all plans:
- hospitalization due to accident
- hospitalization due to illness
- outpatient procedures
- annual health checkup
- hospital room fee
- Doctor’s consultation fee
- other medical costs
- current illness or health condition
- maternity benefit
- serious illness
- organ Donation
- Alternative Remedies Under AYUSH
Home Insurance / Home Insurance
Home insurance comes in handy if there is any damage or loss related to the house. This may seem like a rare occurrence, but if the home is in a place where you think any kind of disaster could strike, then home insurance for the home is a must. Also, if you have already bought or built a house, a home insurance policy can be very important for its protection.
If seen, a home insurance policy can cover the following events and items:
- Damage to the house and its surrounding areas due to natural or man-made calamities
- Protection of plumbing and electrical wiring
- Loss or damage to personal property and belongings
- protection against public liability
- personal accidents
Motor Insurance / Motor Insurance
What is your most valuable asset? Perhaps something of a family heirloom, or perhaps, something of great personal value? Or maybe, your new car? What if a tree falls on the car and ruins the new car due to heavy rain at night? Waste all the money invested in buying the car? Your answer would be yes, but if you had motor insurance your money would not have been wasted.
This type of general insurance provides protection to the vehicle. This includes, but is not limited to, the following:
- Loss or damage due to natural calamities
- Loss or damage due to man-made calamities
- personal accident cover
- third party liability
- breakdown aid cover
Travel Insurance / Travel Insurance
Perhaps you are very lucky that so far your travel experience has been very good. But it should also be known that accidents or mishaps can happen at any time in the journey. Travel insurance can protect you from the financial impact of such incidents. Depending on the type of coverage offered, travel insurance can be valid for Indian or international travel. Generally, these are the things covered by travel insurance plans:
- medical emergency
- loss of goods
- loss of passport
- Accidents during adventure sports
- flight delay
Commercial Insurance / Commercial Insurance
Like individuals, businesses also need insurance. This is where commercial insurance comes in handy. Depending on its cover, commercial insurance can be purchased for property, engineering works, employee benefits, and even business interruption. This type of insurance helps in bringing the business back to normalcy in case of any untoward incident.
Commercial insurance can be especially beneficial for startups and MSMEs. And it benefits even bigger entities, because generally, the losses they incur can be up to lakhs of rupees. And commercial insurance can help you like a mattress and can withstand a lot of shock or even damage.
Here we have seen how general insurance enhances the protection of assets other than the life of an individual. This type of insurance generally does not offer any tax benefit except health insurance, the premium paid for which can be claimed as a deduction from the total income under section 80D of the Income Tax Act. Nevertheless, these types of insurance are essential tools that help in mitigating financial distress caused by unforeseen accidents or incidents.
you read so far
- Just like we insure our life, we can also insure our other things like house, car, health etc. There is general insurance for all of these.
- It is also known as non-life insurance. General insurance is a type of protection cover taken for things other than life.
- There are many types of insurance in general insurance.
- Health insurance covers medical emergencies occurring in life.
- Home insurance comes in handy if there is any damage or loss related to your home.
- Motor insurance covers damage to your vehicle, such as a car or two-wheeler.
- Travel insurance covers accidents that occur during travel.
- Commercial insurance helps businesses recover from the financial impact of damage to property or other assets, among other things.