Types of general insurance plans in India
The insurance segment in India is divided into two categories – life insurance and general insurance. While life insurance policies cover the financial loss suffered due to loss of life, general insurance policies cover the financial loss suffered due to the loss of an asset. General insurance, therefore, covers the loss of economic value of assets or the financial loss suffered due to specific contingencies. General insurance has different types of plans, each of which is designed to cover specific risks. So, let’s understand the concept and the types of general insurance plans in India.
What is general insurance?
General insurance is the insurance of assets, financial assets included. If, due to a contingency which is covered under the plan, there is an economic loss, the loss is compensated by general insurance policies.
Top advantages of general insurance plans
General insurance plans are beneficial because of the following reasons –
- The plans cover financial losses and compensate you for the losses that you suffer. As such, general insurance plans provide you financial security even in the case of contingencies
- In some cases, general insurance plans are mandatory by law. For instance, motor insurance plans are mandatory as per the Motor Vehicles Act, 1988. Similarly, if you are travelling to Schengen countries, you mandatorily need a valid overseas health insurance plan. When you buy such mandated plans, you fulfil the legal obligation and save yourself from violation offence
- General insurance plans help in protecting your savings in emergency situations. You can, therefore, use your savings to fulfil your financial goals
- Health insurance plans, which are a type of general insurance plan, allow you tax benefits. The premiums paid for such plans are allowed as a deduction under Section 80D. This deduction helps in lowering your taxable income which, in turn, lowers your tax liability and helps you save tax.
Types of general insurance plans
There are a lot of general insurance plans available in the market. However, the popular and the most important ones are as follows –
Health insurance
Health insurance plans cover the medical expenses which you incur if you fall ill or are injured and need medical assistance. Since the cost of medicine is very high, health insurance plans prove very beneficial. They pay for the medical expenses thereby saving your finances from the strain of the costs incurred on your treatments.
Features of health insurance plans
Here are some of the common features of health insurance plans –
- Health plans can be taken to cover yourself as well as your family members
- Expenses incurred on room rent, surgery, nurse’s fees, doctor’s fees, ambulance, day care treatments, etc. are all covered under health insurance plans
- The premiums paid are allowed as a deduction. You can claim a deduction of up to INR 1 lakh by paying health insurance premiums for yourself, your family and dependent parents.
- There are different types of health insurance plans available in the market. These include the following –
- Individual health plans which cover a single individual
- Family floater plans which cover the whole family
- Senior citizen plans which cover senior citizens
- Critical illness plans which cover specified critical illnesses
- Disease specific plans for specific diseases
- Top-up and super top-up plans for supplementing an existing coverage
- Hospital cash plans which pay a daily benefit in case of hospitalisation
How much does health insurance cost?
The premiums of a health insurance policy are calculated based on the following factors –
| Factors affecting premiums | How premiums are affected |
| Age of the insured | Higher the age, higher would be the premiums and vice-versa |
| Sum insured selected | Higher the sum insured, higher would be the premium and vice-versa |
| Coverage benefits | More the coverage features, higher would be the premium and vice-versa |
| Number of members covered | More the members covered, higher would be the premium and vice-versa |
| Medical history | If you or any covered member has an adverse medical history, the premium would be higher |
| Discounts available | Higher the discounts offered by the plan, lower would be the premium and vice-versa |
| Type of policy | There are different types of health insurance plans and the premiums are different for different plans |
Motor insurance
Motor insurance plans are general insurance plans for vehicles. These plans are mandatory as per law and have to be bought for every vehicle so that the vehicle is allowed to run on Indian roads.
Features of motor insurance plans
- There are two types of policies available in the market – third party liability and comprehensive
- Third-party plans are legally mandatory while comprehensive plans are voluntary
- Third-party plans cover only the financial liability suffered if you harm any individual or third party property
- Comprehensive plans also cover the damages suffered by your vehicle itself
- There are different motor insurance policies covering cars, two-wheelers and commercial vehicles
How much does motor insurance cost?
Motor insurance premiums are determined based on the following factors –
| Factors affecting premiums | How premiums are affected |
| Type of policy chosen | Third-party plans have lower premiums compared to comprehensive ones |
| Make, model and variant of the vehicle | The make, model and variant determine the value of the vehicle. Higher the value, higher would be the premium and vice-versa |
| Age of the car | Older the vehicle, lower would be the premium and vice-versa |
| Add-ons selected | Comprehensive plans offer optional additional coverage benefits. If the benefits are selected, the premiums would increase because each add-on has an additional premium |
| Discounts available | Higher the discounts offered, lower would be the premium and vice-versa |
| Registration location | Vehicles registered in metro cities have higher premiums than those registered in non-metro cities |
Travel insurance
Travel insurance plans are those which cover financial emergencies that you face when you are travelling to another place. These plans, therefore, cover your trips against unforeseen emergencies.
Features of travel insurance plans
- Travel insurance plans can be of the following types –
- International travel insurance plans
- Domestic travel insurance plans
- Student travel insurance plans
- Senior citizen travel insurance plans
- Single trip policies
- Annual multi-trip policies
- Coverage under travel insurance plans include the following common benefits –
- Medical emergencies
- Medical evacuation and repatriation
- Loss of checked-in-baggage
- Delay of checked-in baggage
- Loss of passport
- Personal accident
- Third-party liability
- Trip cancellation or curtailment
- The policy covers you for the duration of your trip
- You can also cover family members going on a trip with you under the same plan
How much does travel insurance cost?
Premiums of a travel insurance policy depend on the following factors –
| Factors affecting premiums | How premiums are affected |
| Destination | Premiums depend on the destination of your trip. Developed countries like UK, USA, Australia have higher premiums |
| Number of members travelling | Higher the number of family members being covered under the plan, higher would be the premium and vice-versa |
| Age of the members | Higher the age of the members covered, higher would be the premium and vice-versa |
| Trip duration | Longer the duration of the trip, higher would be the premium and vice-versa |
| Sum insured | Higher the coverage amount, higher would be the premium and vice-versa |
| Coverage features | Higher the number of coverage benefits under the plan, higher would be the premium and vice-versa |
| Type of policy | Different travel insurance plans have different premium rates |
| Medical history | If you or any family member suffers from any medical condition, premiums would be increased |
Home insurance
Home insurance plans cover the financial losses that you suffer in case of your home and/or its contents are damaged. Home insurance policies, therefore, provide financial coverage against natural and man-made disasters which cause a loss to your house property.
Features of home insurance
- There are three types of home insurance policies. They are as follows –
- Structure insurance which covers the structure of your home
- Contents insurance which covers the contents of your home
- A comprehensive policy which covers both structure as well as the contents of your home
- The policy covers natural calamities like earthquakes, floods, storms, cyclones, etc.
- Man-made calamities are also covered like fire, theft, riots, etc.
- The policy can be taken on a replacement value clause or market value clause
How much does home insurance cost?
Premiums for home insurance policies depend on the following factors –
| Factors affecting premiums | How premiums are affected |
| Type of policy selected | The type of policy that you select would determine the premium payable |
| Age of the house | Older houses have lower premiums and vice-versa |
| Location | Location of the house determines its construction cost. If the property is located in a prime location the premiums would be higher |
| The expected cost of construction | The expected cost of construction determines the premium rate. The higher the cost the higher would be the premium |
| Coverage amount | Higher the coverage amount is chosen, higher would be the premium |
Fire insurance
Fire insurance policies cover the damages caused by fire and other related perils. The policy covers damages suffered by property or specified assets.
Features of fire insurance plans
- The policy covers the cost of repairs or replacement of the insured asset when it is damaged by fire or related perils
- There are different types of fire insurance policies which include the following –
- Valued policy
- Floating policy
- Specific policy
- Comprehensive policy, etc.
- A fire insurance plan also covers damages suffered due to lightning, floods, storms, cyclones, inundation, impact damage, missile testing operations, etc.
- If any third party property is damaged due to fire or other covered perils, the policy would cover such losses too
- There are various extensions which are available under fire insurance plans. These extensions come at an additional premium. You can add as many extensions that you like to enhance the coverage.
How much does fire insurance cost?
The premiums of fire insurance policies depend on the following factors –
| Factors affecting premiums | How premiums are affected |
| Location risk | If the property is exposed to the risk of fire due to its location, the premium would be high |
| Value of the insured asset | The premium depends on the value of the asset being insured under the plan. Higher the value, higher would be the premium |
| Extensions selected | If extensions are added to the policy, the premium would increase |
| Type of asset | The type of asset being insured also affects the premium rate |
Other types of general insurance policies
Besides the above-mentioned plans, there are commercial general insurance policies too. These policies include the following –
- Marine insurance
- Commercial General Liability Insurance
- Directors and Officers Insurance
- Cyber risk insurance
- Professional Indemnity Insurance
- Group insurance plans, etc.
How to buy general insurance plans?
General insurance policies can be bought offline or online. Buying offline means buying through general insurance agents or by visiting the branches of the company. This might prove to be difficult and inconvenient. Buying online, on the other hand, is quicker and more convenient as you can buy the policy easily from your home or office.
Turtlemint is an online platform which allows you to buy general insurance policies online. All the popular types of general insurance policies are available on Turtlemint’s platform and you can buy the policy easily. Just visit www.turtlemint.com, choose the general insurance plan that you want to buy, enter your details and you would be able to check the available plans. Turtlemint is tied up with leading general insurance providers which offer multiple types of general insurance plans. Thus, on a single platform, you can see, compare and buy any type of general insurance policy that you need. The premiums can be paid online and you can even get the policy issued within minutes.
Top #4 points to consider when buying general insurance
When you want to buy general insurance plans, here are some points which you should always keep in mind:
- Choose a plan which you require. Health insurance plans are a must and if you have a vehicle you also need motor insurance. Travel insurance plans are relevant when you are going on a trip. So, understand your coverage requirements and then buy a plan
- Ensure that the coverage level is optimal to cover your financial losses
- The premiums of the plan should be affordable so that you don’t face a financial strain in paying for the policy
- Always compare before buying. There are different policies available in the market and each policy offers something better than the other. When you compare you would be able to find the best general insurance policy which not only provides extensive coverage but also comes at a lower premium. So, don’t forget to compare. Turtlemint allows you a platform to compare the different types of general insurance policies available. You can check the plans for their coverage benefits and premiums and then buy.
Documents needed to buy general insurance plans
You would need the following documents to buy a general insurance policy –
- Proposal form for the policy
- Identity proof
- Age proof
- Address proof
- Details of the asset which is being covered
- Photographs
- Other documents depending on the type of policy that you buy
General insurance plans are the ideal solution for covering your financial risks. The different types of general insurance policies provide coverage for all possible types of financial risks that you might face. So, choose the policies that you require and invest in general insurance for financial security.
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