Insurance is a contract, represented by a policy, under which an individual or a person receives financial security from an insurance company in the event of a loss. The insurance company pools the risks of its clients to make payments more affordable and convenient for the insured.
Insurance policies are used to protect against the risk of financial losses, both large and small, that may occur as a result of damage to the insured’s or his/her property, or liability for damage or injury caused to a third party.
Insurance policies provide us with protection against the unexpected/uncertain events. Almost anything can be covered by a policy, but some are more important than others which depends on an individual’s requirements.
Below are mentioned some insurance policies that one should consider the most important in 2022.
- Health Insurance
One of the most important types is health insurance. Your good health is what allows you to work, earn money, and live life to the fullest.
After the Covid-19 pandemic, we all have realised that what if you got a serious illness suddenly or were in an accident and weren’t insured? You may be unable to receive treatment or be forced to pay large medical bills.
Thus, preventive services, such as vaccines, screenings, and some checkups, can be covered by health plans purchased through the marketplace. This way, you can keep your health and well-being in order to meet the demands of life.
- Life Insurance
According to many experts, life insurance should be an important part of your financial plan.
What can life insurance do is if you’re married and have a family, what happens when you die?
In that case, Life insurance can be used to replace lost income, pay off debts, or fund your children’s college education. If you’re single, it could cover your funeral expenses as well as any debts you leave behind.
- Auto Insurance
This is one of the most common types of insurance policies, and it is often required in most countries around the world. It is known as vehicle insurance or motor insurance.
Auto insurance has two components:
(i) Vehicle damage
(ii) Third-party damages, which includes death, disability, or property destruction caused by your actions.
The latter is required in the majority of countries.
The Indian Motor Vehicles Act of 1988 made third-party insurance mandatory in India. Motor insurance is provided by all general insurance companies in India for both private and commercial vehicles, including cars, two-wheelers, taxis, trucks, and other motorised vehicles. In the early 2000s, motor insurance pricing in India was detariffed, which means that each insurance company is free to charge whatever it sees fit within some rules imposed by the IRDAI.
- Home Insurance
For many people, their most valuable asset is their home. Home insurance protects you by providing a security net in the event of damage. If you have a mortgage, your lender will most likely require you to have a policy. However, if you do not purchase your own, your lender can do so on your behalf and send you the bill. This could result in a higher price and less coverage.
It may also cover you if your home becomes uninhabitable as a result of a covered claim.
A renters policy is equally important and mandatory if you rent your home. The structure is covered by your landlord’s insurance, but your personal belongings can quickly add up. In the uncertain event of a theft, fire, or natural disaster, your renter’s insurance should cover the majority of the costs.
It may also assist you in paying if you are forced to stay elsewhere while your home is being repaired. Furthermore, renters insurance, like homeowners insurance, provides liability protection.