What is insurance?

Insurance is a means of financial protection against the potential loss from unpredictable circumstances. Insurance helps you recover from financial losses caused by incidents like car accidents, damage to property, unexpected health issues or untimely demise.

Why do I need insurance?

Insurance provides financial protection to your family and you from certain unforeseen events. While it is mandatory to insure your vehicle with Third Party Insurance, purchasing Health Insurance is a choice that you can make to meet unforeseen medical expenses without placing an unnecessary strain on your finances. Life Insurance coverage will provide the necessary financial support to your family in your absence. Life insurance is an important aspect of your long-term financial planning like saving for your retirement or your child’s higher education. Lastly, availing Life and Health Insurance helps you to reduce your tax outgo.

What is premium?

Insurance premium is the amount that you pay for the coverage that you need. While the premium for car and bike insurance is paid in a single annual instalment, health insurance premium can be paid in annual, half yearly, quarterly or monthly instalments. Irrespective of the premium payment frequency, you need to factor in product premiums in your annual and monthly budgets.

What is the policy term?

Every insurance policy is valid for a specific period. Own Damage coverage for car and bike insurance is valid for a year whereas in case of Health insurance you can pay a single premium for a policy term of 2 or 3 years.

What is the claim settlement ratio?

It is one of the most important parameters for selecting an insurer. It is the ratio of settled claims to the total claims filed by the policyholders in a given year. In other words, the claim settlement ratio is calculated by dividing the number of claims paid by an insurer by the number of claims filed with the insurer in a financial year. The claim settlement ratio may vary from year to year depending on the claims settled by a particular insurer. It is a metric of an insurer’s credibility. Other factors being equal, you should buy products from an insurance company with a higher ratio.