Different Types of Insurance Policies: Definition & Types

In today’s time when everything around us is so uncertain, it makes sense to stay prepared for the future in advance. For the same, the popularity of insurance products has become increasingly high. With the help of insurance products, policyholders can get protection against life uncertainties, health uncertainties, and more. Based on the same, there are different types of insurance products such as car insurance, life insurance, health insurance, and more. So, let us understand the different types of insurance in the section below.

What are the Types of Insurance Policies in India?

Broadly speaking, insurance is of two types, let us first discuss the two types and then talk about their subtypes. 

1. General Insurance:

• • General insurance is a contract between the insurance company and the insured, wherein the former agrees to pay and provide financial compensation for everything, except life insurance coverage.
  • All your liabilities towards home, vehicle, health, and others are covered under a general insurance plan.
  • Based on the same, General Insurance is of different types such as Motor Insurance, Health Insurance, Travel Insurance, and more.

2. Life Insurance:

• • Life insurance on the other hand is what provides financial protection in case the policyholder passes away.
  • Thus, unlike general insurance, life insurance coverage is provided under a life insurance plan.

1. General Insurance

As discussed, general insurance covers all kinds of liabilities except life insurance coverage. So, listed below are the key types of insurance products that fall under the category of General Insurance:

1. Motor Insurance:

Motor insurance is of two types, car insurance, and bike insurance, which states that the insurer is liable to pay a certain amount to the policyholder in case their insured vehicle is damaged, lost, or stolen.

• While car insurance provides insurance coverage for your car or four-wheeler, bike insurance on the other hand offers financial coverage for your bike.
• There are some add-ons available that will help in enhancing the benefits of your motor insurance plan such as Engine Protection Cover, Zero Depreciation Cover, and more.

2. Health Insurance:

A health insurance plan provides financial compensation in case the policyholder meets a health emergency. Based on the type of coverage required, health insurance can be of different types.

• For instance, if you want a health insurance plan for your entire family, then you must have a family health insurance plan, on the other hand, if you wish to buy it for your parents who are more than 60 years of age, then you must buy a senior citizen health insurance plan.
• There are other types of health insurance plans as well such as children's health insurance plans, women's health insurance plans, and more. Apart from getting financial protection during medical emergencies, you can also get tax benefits from health insurance plans.

3. Travel Insurance:

A travel insurance plan protects you in case any uncertainty arises during your trip.

• With a travel insurance plan, you can travel stress-free and get coverage for baggage loss, trip cancellation, flight delays, flight hijacks, medical emergencies, or in case of any other uncertainty that arises during the trip.
• Depending on the nature of travel, travel insurance can be of different types such as Student Travel Insurance, Senior-citizen Travel Insurance, Multi-trip Travel Insurance, and more.

2. Life Insurance

Life insurance lets you protect the future of your loved ones even in your absence.

• With life insurance, the policyholder agrees to pay a certain amount as a premium, and based on the sum insured, the beneficiaries of the policyholder get the benefit of life insurance coverage.
• The most common types of life insurance plans are term insurance, ULIP, endowment, money-back policy, and others.
• The best part about life insurance plans is that they provide tax benefits as specified under section 80C of the Income Tax Act of 1961. A tax benefit of up to Rs. 1.5 lakh is provided on life insurance plans. 

How to Buy Insurance Plans Online in India?

You can use the following steps to buy online insurance plans:

• Step 1: First and foremost, you need to identify which insurance plan you need to buy. You also need to figure out the subtypes of the insurance plan.
• Step 2: Once you have decided which plan to buy, then you can compare the different plans available online.
• Step 3: A comparison will help you in picking the right insurance plan for yourself. Check the inclusions and exclusions of the insurance plan you have selected.
• Step 4: Then, contact the insurance company, select the desired plan, and enter all the details like name, the number of insured members, age, and other details while buying the insurance plan.
• Step 5: Finally, pay out the premium. Once done, you will receive an update about the same.

The Bottom Line

So, now that you know the different types of insurance products, we hope it has become easier for you to pick a desired insurance plan. You can explore a range of health insurance plans, car insurance plans, life insurance plans, and others on the InsuranceDekho website.

Also read: How Group Life Insurance is Beneficial for Both Employees and Employers?