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Why not insurance ?


Life is full of uncertainties. We face various risks in our day to day life

including risks to our life, health, property and so on. Insurance is

responsibility, security, peace of mind and the simplest way of telling yourself that you care for your loved ones.

Ensure that you are buying right insurance by
taking the following precautions:
• Be wary of the unauthorized calls
• Be suspicious in case of lucrative offers or low premiums; call the insurance company to check the credentials, in case of a doubt
• Do not sign blank insurance proposal form
• Avoid paying premium in cash. Pay by cheque in favour of insurance company
• Request for receipt as evidence of payment
of premium

• Examine the policy after receipt of the same and ensure that the requested coverage and premium terms are mentioned correctly Insurance frauds are not uncommon.


Why buy Insurance?


What is insurance?

Insurance is a financial tool specially designed to reduce the financial impact of unforeseen events and create financial security. Insurance works on the law of large numbers where
contributions by many in the form of premium paid will take care of the losses of a few.

By paying a small premium for
covering a certain type of loss, you will be protected for a certain sum of money that you will receive if you face that loss.

What insurance to buy?

Insurance is available for unpredictable events such as death, accident, sickness, loss or damage to motor vehicle, property etc.

These are some of the risks against which you should protect
yourself from and accordingly buy life insurance, personal accident insurance, health insurance, motor insurance, property insurance etc. While life insurance, critical illness, personal accident and health insurance are offered by life insurance companies; property insurance, motor insurance, householder’s insurance, health and


What kind of policy to purchase?

If you are an earning member of your family, and there are people who are financially dependent on you, you need life insurance. But you should know or should ask the insurer or agent to get

the most efficient and correct policy that suits your needs and willingness to take risk for greater return.

Accordingly, you can choose a term plan without maturity  nefit, an endowment plan with maturity benefit, a Unit Linked Insurance Plan with returns based on the performance of the funds chosen by the policyholder or an annuity plan for periodic

payments.Every advertisement has a tag line“Insurance is the subject matter of solicitation”. What is solicitation?

“Solicitation” in insurance means approaching a client by an insurer or an intermediary with a view to convince the client to purchase an insurance policy.

personal accident insurance are offered by non-life insurance companies (also known as general insurance companies).

The insurance policy that you buy must meet your requirements. This means you must first identify what your needs are. You must choose your life insurance policy depending on which life-stage you are in and your aspirations for the future. Insurance need may differ depending on whether you are about to start a family or have growing children with education needs or want
to plan for your retirement. You should join a health insurance scheme while young and ensure continuous coverage.
While third party motor insurance is statutory, i.e., it is required under the Motor Vehicles Act 1998, it would be wise to buy a comprehensive motor insurance policy that covers damage to vehicle as well.

Protecting house and contents against the risks of fire, flood and earthquake will secure your hard￾earned savings to meet your other financial needs instead of using them for rebuilding.


. Purchase insurance policies only from the following :
i. Registered insurance companies
ii. Licensed insurance Agents (including corporate agents and micro-insurance agents)
iii. Licensed Insurance Brokers
iv. Licensed web aggregators

B. Verify genuineness of the person and entity before making any paymen i. Ask for an identity proof and particulars of IRDA license of the person/entity soliciting insurance
ii. Ask for the details of address and telephone number of the person and entity concerned, especially in case of telesales
iii. Check the IRDA website to verify the details of insurance companies, brokers and web-aggregators and use the agent
locator on IRDA web-site to check for agents.

C. If any unlicensed intermediary or an unregistered insurer solicits insurance, file FIR with police and intimate IRDA.
Any payment you make to such unlicensed intermediaries or
unregistered insurers is at your own risk.

How to buy insurance and whom
to buy it from?


Property/casualty and life insurance policies were once sold almost exclusively 
by agents—either by captive agents, representing one insurance company, or 
by independent agents, representing several companies. Insurance companies 
selling through captive agents and/or by mail.... Read More

All types of insurance are regulated by the states, with each state having its 
own set of statutes and rules. State insurance departments oversee insurer sol￾vency, market conduct and, to a greater or lesser degree, review and rule on 
requests for rate increases for coverage... Read More

Insurers are required to use statutory accounting principles (SAP) when filing 
annual financial reports with state regulators and the Internal Revenue Service. SAP, 
which evolved to enhance the industry’s financial stability, is more conservative .... Read More

The insurance industry safeguards the assets of its policyholders by transferring risk from an individual or business to an insurance company. Insurance compa￾nies act as financial intermediaries in that they invest the premiums they collect 
for providing this service....Read More





Real Value of Insurance
Through Right Buying - A Few Tips

1. Make sure you purchase insurance policies only from the

• Registered insurance companies
• Licensed insurance Agents
•Licensed Insurance Brokers and Common Service Centres (CSCs)
• Licensed web aggregators

2. Verify genuineness of the person and the entity before
making any payment:


• Ask for the identity proof of the person /entity soliciting insurance.
• Ask for the details of address and telephone number of the person and the entity concerned, especially in case of
• Check the IRDA website to verify the details of insurance companies, brokers and web aggregators.

3. Choose the insurance product suitable to you based on the

• Life stage,financial position andfinancialrequirements
• Purpose ofthe policyto be purchased -
• to insure againstriskto life or property
• as long-term savings
• totake care of hospitalization needs infuture
• to savefor old age / pension / annuity
• to meet mandatoryrequirements
• Benefits offered in terms of adequacy of sum assured/sum insured
• Tax incentive, if available


4. Ensurethefollowing while purchasing any insurance policy:

• Readthe prospectus and proposalform carefully.
• Fill inthe details completely before signingthe proposalform.
• Retain a copy ofthe proposalformforreadyreference.
• The insurer has a duty to furnish free of charge a copy of the
proposal form within 30 days of the acceptance of the proposal. Please collect the same along with the insurancepolicy.
• Ifthe premium is paidthrough cheque, please ensurethat it is
in the name of the registered insurance company; and obtain receipt of payment.
• Do not make payment in the name of any individual; or if the
payment is by cash, make sure it is not without ascertaining
the credentials.

5. Life insurance policy mainly provides risk coverage for life.

But it can also serve as a tool for long term investment and involves longterm commitment.

Take care of the following after receiving the Life insurance

• Readthe policy document carefully.
• Check the mode of premium payment, term of the policy,
maturity benefits offered, lock-in period, surrender valueetc.
• Ensure that the terms and conditions as per policy document arethe same as promised atthetime of purchase.
• If you disagree with the terms and conditions, return the policy to the insurer within 15 days from the date of receipt of policy giving reasons for objections. You are entitled for refund of the premium paid after deducting proportionate risk premium, the expenses incurred by insurer for medical examination, stamp charges.
• Pay premium regularly and promptly; and do not allow the
policyto lapse.
• Continuethe policy without a breakto derive maximum value
out of insurance policy as insurance cover will be available only ontimely payment of premium.
• Inform the family members about the purchase of insurance
policy and its benefits, especiallytothe nominee.

6. Never fall prey to fictitious offers made by spurious callers

promising high returns or unreasonable gains involving sale
or redemption of insurance policies or other financial products.

7. Never fall prey to calls made in the name of IRDA offering
bonus or profits on investment.

RDA does not involve in sale of any kind of insurance or financial products or in investment of premium of insurance companies whatsoever.

7. Never fall prey to calls made in the name of IRDA offering
bonus or profits on investment.

IRDA does not involve in sale of any kind of insurance or
financial products or in investment of premium of insurance
companies whatsoever.


Auto Insurance Basics

Auto insurance protects against financial loss in the event of an accident. It is a contract between the policyholder and the insurance company.

The policyhold￾er agrees to pay the premium and the insurance company agrees to pay losses as defined in the policy.
       Auto insurance provides property, liability and medical coverage:

             Property coverage pays for damage to, or theft of, the car.
             Liability coverage pays for the policyholder’s legal responsibility                    to 
                     others for bodily injury or property damage.
              Medical coverage pays for the cost of treating injuries,                                   rehabilitation 
                     and sometimes lost wages and funeral expenses.

Most states require drivers to have auto liability insurance before they can legal￾ly drive a car. (Liability insurance pays the other driver’s medical, car repair and 
other costs when the policyholder is at fault in an auto accident.) All states have laws that set the minimum amounts of insurance or other financial security drivers have to pay for the harm caused by their negligence behind the wheel if an accident occurs. Most auto policies are for six months to a year. A basic auto insurance policy is comprised of six different kinds of coverage, each of which is priced separately (see below).


Auto Insurance Basics

This coverage applies to injuries that the policyholder and family members list￾ed on the policy cause to someone else. These individuals are also covered when driving other peoples’ cars with permission. As motorists in serious accidents may be sued for large amounts, drivers can opt to buy more than the state￾required minimum to protect personal assets such as homes and savings.

•Life stage,financial position andfinancialrequirements
• Purpose ofthe policyto be purchased -
• to insure againstriskto life or property
• as long-term savings
• totake care of hospitalization needs infuture
• to savefor old age / pension / annuity
• to meet mandatoryrequirements
• Benefits offered in terms of adequacy of sum assured/sum insured
• Tax incentive, if available

This coverage pays for the treatment of injuries to the driver and passengers 
of the policyholder’s car. At its broadest, PIP can cover medical payments, 
lost wages and the cost of replacing services normally performed by someone 
injured in an auto accident. It may also cover funeral costs.


1. Bodily Injury Liability

2. Medical Payments or Personal Injury Protection (PIP)

3. Property Damage Liability


Homeowners Insurance 

Homeowners insurance provides financial protection against disasters. It is a package policy, which means that it covers both damage to property and liability, or legal responsibility, for any injuries and property damage policyholders or their families cause to other people. This includes damage caused by household pets. 

Damage caused by most disasters is covered but there are exceptions. Standard homeowners policies do not cover flooding, earthquakes or poor maintenance. 
Flood coverage, however, is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insur￾ers. Earthquake coverage is available either in the form of an endorsement or as a separate policy. Most maintenance-related problems are the homeowners’ responsibility.
A standard homeowners insurance policy includes four essential types of coverage. They include:


Homeowners Insurance Basics

Liability coverage protects against the cost of lawsuits for bodily injury or prop￾erty damage that policyholders or family members cause to other people. It also pays for damage caused by pets. The liability portion of the policy pays for both the cost of defending the policyholder in court and any court awards—up to the limit of the policy. Coverage is not just in the home but extends to anywhere in the world. Liability limits generally start at about $100,000. However, experts recommend that homeowners purchase at least $300,000 worth of protection. 
An umbrella or excess liability policy, which provides broader coverage, includ￾ing claims for libel and slander, as well as higher liability limits, can be added 

This part of a policy pays to repair or rebuild a home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in the policy. 
It will not pay for damage caused by a flood, earthquake or routine wear and tear.

Most standard policies also cover structures that are not attached to a house such as a garage, tool shed or gazebo. Generally, these structures are cov￾ered for about 10 percent of the total amount of insurance on the structure of 
the home.

Furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50 to 70 percent of the amount of insurance on the structure of a home. This part of the policy includes off-premises coverage. 
This means that belongings are covered anywhere in the world, unless the poli￾cyholder has decided against off-premises coverage. Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are sto￾len. To insure these items to their full value, individuals can purchase a special personal property endorsement or floater and insure the item for its appraised value.


1. Coverage for the Structure of the Home

2. Coverage for Personal Belongings

1. Bodily Injury Liability


Business Insurance Basics

Most businesses need to purchase at least the following four types of insurance:

1. Property Insurance
Property insurance compensates a business if the property used in the business is lost or damaged as the result of various types of common perils, such as fire 
or theft. Property insurance covers not just a building or structure but also the contents, including office furnishings, inventory, raw materials, machinery, 
computers and other items vital to a business’s operations. Depending on the  type of policy, property insurance may include coverage for equipment break down, removal of debris after a fire or other destructive event, some types of water damage and other losses.

Also known as business income insurance, business interruption insurance is a type of property insurance.

A business whose property has sustained a direct physical loss such as fire damage or a damaged roof due to a tree falling on it in a windstorm and has to close down completely while the premises are being repaired may lose out to competitors.

A quick resumption of business after a disaster is essential. That is why business interruption insurance is so important.

        There are typically three types of business interruption insurance. A business can purchase any one or combination of these.

         • Business Income Coverage: Compensates for lost income if a company has to vacate its premises due to disaster-                 related damage that is covered under the property insurance policy. Business income insurance covers the profits the             company would have earned, based on financial records, had the disaster not occurred. The policy also covers                       operating expenses, such as electricity, that continue even though business activities have come to a temporary halt.

          • Extra Income Coverage: Reimburses the company for a reasonable sum of money that it spends, over and above                    normal operating expenses, to avoid having to shut down during the restoration period.
          • Contingent Business Interruption Insurance: Protects a businessowner’s earnings following physical loss or damage                to the property of the insured’s suppliers or customers, as opposed to its own property. 

Damage due to floods, earthquakes and acts of terrorism are generally not covered by standard business property insurance but can be purchased through various markets.

Business Interruption Insurance