What is insurance?

Throughout our lives, we work, invest, create value and do everything to ensure a secure future for our loved ones. But life is full of surprises and you should be prepared for them. Insurance helps you to be financially prepared for any unexpected situation. Whether it is your life, health, home, car or even a trip abroad, getting insured is a one-stop solution to life's many uncertainties.

1. When you select an insurance provider, they assess your needs and present situation. This includes your lifestyle, your health history, any risks involved in your profession, etc. Based on these factors, and the requirements of your family, a cover amount is decided also known as the sum assured.
2. In case of an unfortunate event, your family gets this cover amount to help them meet their financial requirements. However, for your family to avail these benefits, it is important that you pay your premiums regularly.

1. Insurance plans safeguard your financial interests in case of loss and damage. They offer financial protection against the uncertainties of life and ensure you have the means to move on and overcome any losses with adequate compensation.
2. Insurance serves as a powerful tool for managing risks. Insurance for assets, such as your house, car or other precious possessions, lowers the risk of loss or damage. In case of any untoward incident, you can claim the insurance payout and cover the losses. Similarly, in the case of health or life insurance, the payouts can be used to cover medical expenses and can help a grieving family minimise the risk of loss of income.
3. Regardless of whether you ever need to make a claim, purchasing insurance provides peace of mind. The knowledge that you have a financial safety net to rely on can be immensely reassuring, as it offers you a sense of security and stability.
4. Purchasing the appropriate insurance plan ensures legal compliance and helps avoid potential legal complications. While not all types of insurance are mandatory by law, certain ones are required in specific situations. For example, according to the Motor Vehicles Act in India, motor insurance is obligatory for all vehicle owners. Similarly, many countries mandate travel insurance with a specified coverage amount as a requirement for obtaining a travel visa.
5. Medical expenses can quickly deplete a large portion of your savings. Factors such as food adulteration, pollution, sedentary lifestyles and rising stress levels contribute to the increasing prevalence of diseases. Coupled with medical inflation, these factors can create a barrier to accessing necessary healthcare when needed. However, with health riders available through term life insurance policies, you can ensure that you always have the means to afford healthcare and prioritise your physical and mental well-being.
6. Adequate insurance provides a crucial safety net and eliminates the need to dip into your savings or compromise on your planned and unplanned financial needs in the event of an unforeseen circumstance. With the appropriate insurance plans in place, you can minimise losses without deviating from your financial journey.
7. Some insurance plans provide the opportunity to invest your money while also securing an insurance cover. These plans are designed to facilitate wealth creation and can assist you in preparing for numerous future goals, like retirement, house purchase and others while protecting your family in case if an unfortunate event.

Compare cover, affordability, exclusions, waiting periods and claim procedures. Read the policy wording carefully: benefits differ between plans.