Risk & Insurance

Any individual runs a risk of a) Premature Death or b) Living too long. Life insurance is product that offers in management of both the risks.

Life insurance is contract between insurer and insured, where in the insurer promises to pay the nominee, the sum of money upon the death of the insured. The value for the policy owner is the ‘peace of mind‘ one has got by paying premiums to the insurance company, in knowing that the death of the insured person will not result in financial hardship of the dependents. 

In an unfortunate event of death, Life insurance could provide :
1. Income to family members so they can maintain their basic lifestyle.
2. Pay off mortgage, so that the house is free and clear of loan.
3. Education for your children.
4. An emergency fund to handle an unexpected financial crisis. 

There are different types of Life Insurance policies available in the insurance world. Mostly categorized into two Term Insurance and Endowment. We usually suggest are investors Term Life Insurance.

What is Insurance?

Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. It is like a transfer of financial risk of a loss, from one entity to another, in exchange for payment. There are two parties involved in insurance. They are: the insured (policy holder) and the insurer (insurance company). The policyholder pays a certain amount of fees (premium) at regular intervals to the insurer. And in return, the insurance company agrees to cover the financial losses and expenses of the policyholder. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.How does insurance work?

When one takes an insurance policy, a premium is paid to the insurance company. This money is pooled with the premiums of others who have taken insurance with the particular firm who are exposed to the similar risks that you have covered. The collected premiums forms a pool of money from which any claim is settled or paid off. The basic underlying assumption is that a majority of the policy-holders would never need to rise the claim, thus making it viable arrangement for the insurance provider.Types of Insurance:

Insurance is available for a very large number of reasons and purposes. In general, the insurance is divided into two main categories – Life & Non-Life. The non-life category has many different types of insurance available.The following are prominent types of insurance available…

  • Life Insurance – coverage in case of death / injury of the insured
  • Health Insurance – medical and accident insurance in case of any illness / accident
  • Motor Insurance – insurance against damages and third party claims in case of any accident, damage to vehicles
  • Travel Insurance – insurance while traveling against loss of luggage / documents, accident / illness during travel, etc.
  • Credit Insurance – insurance against loans taken in case of any eventuality
  • Property Insurance – insurance of property like home / factory, etc. and movable assets against calamities, fire, theft, etc.
  • Fire Insurance – insurance to property against against accidents, fire, lightening, riot , floods, etc.
  • Marine Insurance – insurance against the ‘perils of the sea’ covering namely hull, cargo & freight
  • Professional Indemnity Insurance – insurance against loss/circumstances incurred as result of negligent act, error or omission in carrying out the profession / business.

What is Term Life Insurance ? 

Term Life Insurance provides insurance cover to the individual for the specific term one has decided during the proposal of the policy. The policy holder pays a fixed amount of premium each year, to the insurance company in return for their promise that if the policy holder pass away during the length of term, the nominee of the policy will receive a defined lump sum payment equal to Sum Assured. If the policy holder do not die during the term, no benefit is passed on to the policy holder, nor the premiums are returned. The term life insurance are most cheapest form of insurance available. In simple terms, term life insurance is just like your car insurance. Term Life Insurance is purely for risk protection.

Buying term life insurance and investing the difference is a concept involving Term Life Insurance and investments strategies that allows individuals to eventually “self Insure” and provides an alternative to endowment policy.

Investors making use of the “buy term and invest the difference” concept separate their investments from their insurance by setting aside money every month equal to the premium that a endowment plan would require, then use a portion of this money for the term premium and place the rest in a equity mutual fund or any other investment avenue of his choice.

We asses your financial status, suggest you the appropriate amount of Life Insurance, and recommend you with best insurance products available.

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