The Jumpstart kit for Personal Insurances in India
Wednesday, 26. August 2009, 12:53:13
The Jumpstart kit for Personal Insurances in India
Generally on the whole, Insurance can be classified into the following 3 main categories.
1. Term Insurance - (Life cover with no Returns)
Terms insurance is the basic insurance, that gives you or your family a lump sum money if you lose part of your body or life in an unfortunate event. This is relatively cheap and can be bought for 1 or more years.
2. Life Insurance - (Life cover with returns)
This is a insurance that is similar to term insurance, but it gives you money at the end of policy period. The amount you invest yearly will generate bonuses periodically. At the end of policy period, you will get your amount invested plus, the bonues. Life insurance generally covers medical expenses as well as life and accidents.
3. Medical Insurance / Cover - (Medical Cover with no returns)
Medical Insurance covers only the medical expenses that are submitted by you during the policy year. This is further divided into general medical expense cover, critical illness cover (similar to Term insurance, but gives you a lumpsum if you are diagnosed for any chronic diseases, treatments) etc. In simple words, Medical cover gives you the cashless hospitalization benefit. In case of emergency, you can get admitted into any one of the network hospitals and all the expenses will be taken care by the Insurer. For non-network hospitals you can reimburse the bills.
Apart from the above 3, there is another type of life insurance that invests your money in Units (shares) and gives your higher profits.
4. ULIP - Unit Linked Insurance Plan - (Life cover with more returns)
ULIPs are Life Insurances, that operate in a slightly different way. The amount you invest will be invested in Shares (based on the options you choose). ULIPs gives you higher returns than Life Insurance. But sometimes the returns may vary depending on the market conditions. ULIPs are part money making, part insurance covers.
So what are the basic set of packages an individual must take?
For any Individual, the following 3 Insurances must be considered.
1. Term Insurance
2. Medical Insurance
3. ULIP / Life Insurance
What would be the ballpark charges for purchading above insurances?
1. Term Insurance - Rs.3000 (avg) for a Rs.10,00,000.00 (10 Lakh) cover.
2. Medical Insurance - Rs.2500 (avg) for a Rs.2,00,000.00 (2 Lakh) cover.
3. ULIP / Life - minimum Rs.10,000 / year for 20 - 30 years (avg) for a Rs.4,00,000.00 (4 Lakh) return. You or your family may receive close to some Rs.1,00,000.00 (1 lakh) or more in the unfortunate event of your disability or demise. The more you invest, higher will be the cover/returns.
So for one year, it will cost you Rs.15,000 (appx) for the basic set of Insurance covers.
What about families? Can I extend my insurance coverage to family coverage?
Yes that is possible. You need to pay the additional charges. Some insurance providers may ask you to purchase a fresh policy for family coverage.
Generally on the whole, Insurance can be classified into the following 3 main categories.
1. Term Insurance - (Life cover with no Returns)
Terms insurance is the basic insurance, that gives you or your family a lump sum money if you lose part of your body or life in an unfortunate event. This is relatively cheap and can be bought for 1 or more years.
2. Life Insurance - (Life cover with returns)
This is a insurance that is similar to term insurance, but it gives you money at the end of policy period. The amount you invest yearly will generate bonuses periodically. At the end of policy period, you will get your amount invested plus, the bonues. Life insurance generally covers medical expenses as well as life and accidents.
3. Medical Insurance / Cover - (Medical Cover with no returns)
Medical Insurance covers only the medical expenses that are submitted by you during the policy year. This is further divided into general medical expense cover, critical illness cover (similar to Term insurance, but gives you a lumpsum if you are diagnosed for any chronic diseases, treatments) etc. In simple words, Medical cover gives you the cashless hospitalization benefit. In case of emergency, you can get admitted into any one of the network hospitals and all the expenses will be taken care by the Insurer. For non-network hospitals you can reimburse the bills.
Apart from the above 3, there is another type of life insurance that invests your money in Units (shares) and gives your higher profits.
4. ULIP - Unit Linked Insurance Plan - (Life cover with more returns)
ULIPs are Life Insurances, that operate in a slightly different way. The amount you invest will be invested in Shares (based on the options you choose). ULIPs gives you higher returns than Life Insurance. But sometimes the returns may vary depending on the market conditions. ULIPs are part money making, part insurance covers.
So what are the basic set of packages an individual must take?
For any Individual, the following 3 Insurances must be considered.
1. Term Insurance
2. Medical Insurance
3. ULIP / Life Insurance
What would be the ballpark charges for purchading above insurances?
1. Term Insurance - Rs.3000 (avg) for a Rs.10,00,000.00 (10 Lakh) cover.
2. Medical Insurance - Rs.2500 (avg) for a Rs.2,00,000.00 (2 Lakh) cover.
3. ULIP / Life - minimum Rs.10,000 / year for 20 - 30 years (avg) for a Rs.4,00,000.00 (4 Lakh) return. You or your family may receive close to some Rs.1,00,000.00 (1 lakh) or more in the unfortunate event of your disability or demise. The more you invest, higher will be the cover/returns.
So for one year, it will cost you Rs.15,000 (appx) for the basic set of Insurance covers.
What about families? Can I extend my insurance coverage to family coverage?
Yes that is possible. You need to pay the additional charges. Some insurance providers may ask you to purchase a fresh policy for family coverage.
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