Meaning of Life Insurance

It is true that Human life cannot be valued but there exists financial loss to the household if the one who earns dies or gets any kind of disability. Today lives are at risk due to natural, medical and accidental causes. When someone dies or gets permanent or temporary disability due to any reason, the household or the dependants may have to face many financial challenges. Therefore the cost of funeral expenses, running the household, studies, upbringing and marriages of children everything becomes a burden and sometimes may lead to debts for the dependants of the one who died.

Meaning of Life Insurance

Life insurance is the contract between the insurance policy holder (who is insured or who pays the premium) and the insurer that can be any private, non-profit agency or any affiliated government body. The insurer promises to pay a certain sum of money that is called sum assured on the death of the person insured to those are specified as beneficiaries in the policy. Sometimes some other events such as terminal or critical illnesses and funeral expenses are also compensated. Death due to riot, fraud, war civil commotion and suicide are excluded and not compensated the policy becomes null and void in such cases.

Parties involved in Life Insurance

Parties involved in the contract of insurance may be several and most of the times the terminologies are misunderstood and common people gets confused with insurance terms. However, there exists difference between the policyholder or the owner and the one who is insured. Owner of the policy is the one who pays the premium and who purchases the policy for self or for someone in family. If you are purchasing life insurance policy for yourself then you are both the owner and the insured. The beneficiary who is in most cases the dependants of the insured, get compensation in the event of policyholder’s death.

Types of life insurance

There may be various kinds of life insurance policies being bought and sold every day and each policy differs in its terms, benefits and costs to each person and from one provider to another. To understand types of life insurance policies we may divide them into three main categories they are Term Life Insurance, Universal Life Insurance and Whole Life Insurance.

Term life insurance requires payment of fixed amount and coverage for a fixed period of time say 10 or 15 years that is called ‘term’ or ‘span’ of the policy. These policies cover life and pay benefits if the insured person dies within the term.

In universal life insurance policy, the policyholder has the flexibility of paying any amount at anytime and the coverage is provided indefinitely from these policies.


Whole life insurance policies offer life coverage for whole life or usually until 100 years of age of the person insured. They pay the sum assured amount at the event of death and at maturity if the insured is alive until the policy expires.

There are some other types of life insurance policies such as endowment products that pay benefit at death or at maturity if the policy holder is alive until policy expires and money back products that pay specific amount at some specified dates along with the life coverage and maturity benefits. Annuity policies are also offered in which payment are fixed for a particular time and then annuities are provided after maturity at some specific dates along with life coverage. Thus, it is wise to opt for life insurance policy that provides peace of mind and security for the dependants after you.

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Understanding Health Insurance

In this unpredictable world, occurrence of accidents and major or minor health problems have become very common and thus protecting your lives with an insurance cover is important for everybody. Covering mishaps and any medical assistance needed in the normal due course helps you greatly in the event of any emergency as it provides financial backing. 

Purchasing health insurance policy may be very confusing for anybody as insurance has complex terminologies and hidden charges. Let us get a proper understanding of what exactly is health insurance all about.

Understanding Health Insurance

A health insurance is the insurance covering medical expenses for those who are covered and are paying premiums. Health insurance may also be called a contract between you and the insurance provider to cover medical expenses cashless or reimbursed against a yearly or monthly renewal of the policy. You can take health insurance individually and for your whole family and can cover medical expenses for all those who are covered. You will find many private insurance companies offering different set of policies and introducing various plans each day.

Who Provides Health Insurance

Private medical insurance companies, hospitals, medical service providers and non-profit health organizations provide health insurance to common public. There are some other types of health insurance facilities available to the military and army officers, federal civilians and other government employees who are being covered by their respective employers in lieu of their employment. Health insurance is availed on individual as well as group basis and generally, the organizations purchase group health insurance for their employees.

Types of health insurance plans

There are mainly three types of health insurance plans individual health plans, family floater plans and unit linked health insurance plans.

Under individual health insurance, the medical expenses of the person insured are covered up-to a predefined limit.

Family floater plans cover all the members in a family up-to a limited amount for a particular time or for lifetime depending upon terms of the policy.

Unit linked health insurance policies are linked to market investment along with the health benefits and the returns usually depend upon the market conditions. Unit linked insurance is usually recommended only when you are very much aware of the market fluctuations and are ready to take risks.

Cashless and Reimbursements

When the need arises, proper treatment is provided by the cashless hospitals that are in tie up with your insurance provider. In this case, all you need to do is inform your insurance company within the stipulated time of taking the cashless benefit and complete a bit of paper work that hospital helps with.

In some cases, you will have to pay the hospital expenses and then the insurance company reimburses them on claiming along with the bills and all the receipts. You need to take care of one thing that you once read all the documents and claiming procedure while opting for health insurance as terms differ company to company.

 

Protecting yourself and family with a health insurance plan is highly recommended in today’s unforeseen scenarios. However, you need to be very careful while purchasing any insurance as insurance terms are quite hard to understand and in most cases, people end up having stuck in redundant and useless policies. Always study few important things comprehensively like availability and convenience of reaching network hospitals for cashless benefits, ease and terms of cashless benefits, claiming procedures and requirements. Some other things like age until renewal of policy is allowed, exclusions that policy does not cover and information of third party administrators an agency that is responsible for settling claims are also essential to study to avoid any hassle in future.

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