All You Need to Know about Different Types of Insurance and Their Uses

A good investment portfolio consists of more than just efficient tools for wealth creation - it also consists of tools by which your wealth can be protected from any unforeseen circumstance. The principle among such tools in which all individuals and families should be invested, is insurance. The right insurance plans can go a long way in protecting your finances as well as the future financial needs of your loved ones. But, with the plethora of insurance plans and products in the market, it can be difficult to figure out what to opt for.

To make this decision easier, here is all you need to know about the essential types of insurance, their uses as well as how they can benefit you in the long run.

Why Is Insurance Important?

While it is possible to set aside savings to achieve one’s goals and priorities, it is nearly impossible to be completely financially prepared for every unforeseen event. This is where insurance comes in. By availing an insurance plan, you can protect your finances from the devastating cost of an unfortunate circumstance, such as loss of a loved one, illness, medical emergencies, theft and damage. Availing insurance plans, particularly various types of insurance plans, ensures that you and your family can enjoy true financial security as well as peace of mind for years to come.

Types of Insurance and Their Uses

In order to avail insurance plans that are the right fit for your financial priorities, it is worth knowing more about the various types of insurance on offer. Here are four essential types of insurance that most investors should consider:

1. Life Insurance

One of the most common types of insurance availed, life insurance is the type of insurance whereby the life of a person is insured. In the event that the insured passes away, a predetermined amount of money known as death benefit is provided to his or her beneficiaries. Life insurance should be a priority for individuals who are the sole financial providers of their family and have beneficiaries who depend on their income. In their absence, the future financial needs of their family can be protected by the financial assistance provided by life insurance coverage.

2. Motor Insurance

This is the type of insurance that offers financial coverage in the event of an accident or unfortunate incident involving your vehicle. If you own a vehicle of any kind, it is mandated by law that you avail a motor insurance with at least third party liability coverage. However, you can also avail various types of motor insurance that can offer coverage in the event that your vehicle sustains natural or man-made damage such as fire, theft and various natural calamities. Motor insurance can be availed for a variety of private vehicles such as cars, jeeps, bikes and scooters as well as for commercial vehicles.

3. Health Insurance

The recent pandemic outbreak has made it clearer than ever that we must always be prepared for a variety of medical emergencies. To that end, health insurance provides a part of or the entire financial coverage for the medical and surgical expenses of the insured individual. At a time when hospitalisation and medical assistance is getting costlier, health insurance greatly reduces the financial burden of treating various types of illnesses and medical conditions.

4. Home Insurance

As Indians, we greatly pride ourselves in our ability to own, manage and decorate our own homes. However, unforeseen home-related incidents such as fires, earthquakes, floods, burglaries, and various forms of damage can lead to substantial financial setbacks for years to come. That is why home insurance is considered an essential insurance plan for homeowners, and even home renters, everywhere. Not only do home insurance plans offer financial coverage for the damage done to the structure of your home but also for your valuable items contained within it.

Additional Read: What is Home loan insurance? Is it necessary for you?

5. Critical Insurance

Owing to our changing diets and lifestyles, people today are more susceptible than ever to contract various lifestyle and critical illnesses. These include various serious illnesses such as cancer, heart attack, stroke and various kidney diseases. In order to cover the increasing costs for diagnosis and treatment, critical insurance plans are an ideal option.

6. Covid Insurance

Moreover, keeping in mind the health concerns surrounding the pandemic of Coronavirus, there are also various efficient Covid Insurance plans available in the market. These plans aim at providing the insured with the financial assistance required to deal with the diagnosis and treatment costs of contracting Covid-19. Thus,  they help you rest assured that you are covered in these difficult circumstances.

Conclusion

The path to making wise investment choices starts with ensuring that not only do your finances grow, but that they are secured as well. That is why the importance of availing insurance cannot be overstated. Insurance plans of any kind can help protect your finances from the many uncertainties of life. Moreover, by availing various types of insurance, you can rest easy that the many financial goals you have achieved over the years, such as your dream home and vehicle, will be safe and secure.

In today’s age, availing insurance has even become easier than ever. With the Moneyfy app offered by Tata Capital, you can easily browse through and avail a number of insurance plans that best suit your financial priorities.