Insurance is a contract between the policyholder and insurer wherein the insurer promises to cover financial loss occurring due to certain unfortunate events. In India, there are two broad categories of insurance: General Insurance which includes Health Insurance, motor insurance etc. Life Insurance which is further divided into categories like ULIP, Term Insurance, Endowment, Annuity etc.

Health insurance offers financial support for expenses that could be related to hospitalization costs, cost of medicines or doctor consultation fees among others. Considering the rising medical inflation, health insurance could be considered a necessity.

The core objective of Life insurance is to provide financial support to the family of the policyholder in case of his/her demise. Along with the death cover, some life insurance policies also come with a saving and investment component. Thus, life insurance is the key to financial security for policyholders and their families in times of uncertainty.

As per the Motor Vehicles Act, it is mandatory for all motor vehicles to have ‘third-party liability’ motor insurance cover in India. Third-party Cover Third-party motor insurance covers damages & losses caused to a third-party i.e. person, vehicle or property. Comprehensive Cover Comprehensive car insurance covers both third-party liabilities and damages to your own car. For eg., Aman met with an accident while driving his car. During the accidents he hits a shop, causing damage to the shop and his own vehicle. If he had a Third Party cover for his car, only the damages caused to the shop will be covered by the insurance company. They will not pay anything for the expenses incurred to repair Aman’s own vehicle. If he had a Comprehensive car insurance, the insurance company would pay for the damages caused to the shop and to Aman’s own vehicle

Personal accident insurance covers medical expenses arising due to an accident along with compensation in case of partial or permanent disability or death.

A rider/add-on is an optional coverage or feature you can add to your insurance policy. Since these are additional features being added to the base policy they come at a very low price.

The insurance premium is the sum of money that is paid to buy an insurance policy. The premium may depend on various factors such as the type of cover opted by the policyholder, age of the policyholder, and amount of coverage among others.

The amount that the beneficiary of the life insurance policy will receive in case of death or after a set period is called sum assured. Sum Insured is offered usually in case of a general insurance policy like Health or Motor insurance. It indicates the maximum amount of coverage that the policyholder will receive from the insurer.

The person nominated by the policyholder to receive the benefits promised in the insurance policy in case of his/her unfortunate demise is called a nominee. Only a family member can be appointed as a nominee. Generally spouse, children or parents are appointed as nominees.

Tax Benefits in Health Insurance: As per Section 80D of the Income Tax Act, you can claim a deduction from the taxable income for the premium paid for a health insurance policy. Health insurance premium paid for your family and parents is also eligible for tax deduction under Section 80D. (Refer to Section 80D of the Income Tax Act or contact your financial advisor to understand the maximum deduction) Tax Benefits in Life Insurance: Under section 80C, you can avail a deduction of upto ₹1.5 lakh for premiums that you pay towards a life insurance policy, while Section 10(10D) makes income on maturity and claim tax-free.