Why Insurance
Sign in

why insurance

icicipru,sr sales manager, insurance,finance
Before buying a Life Insurance Policy it is always important to find out why do I want to buy Insurance and for what purpose. How much Life insurance cover do I need comes second.

Insurance in its basic form is defined as “ A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."

In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. By entering into contract the Insurance company agrees to pay the policy holder

or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums.

Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. insurance companies collect premiums to provide for this protection. By paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event.

For Example if a person buys a Life Insurance Policy by paying a premium to the Insurance company , the family members of insured person receive a fixed compensation in case of any unfortunate event like death.

There are different kinds of Insurance Products available such as Life Insurance , Vehicle Insurance, Home Insurance,

Travel insurance, Health or Mediclaim Insurance etc.


There are certain factors which should be considered before buying an Life Insurance Policy.

Your age and number of dependents.
Your Annual Income and Annual Expenses.
Your outstanding Liabilities like HOME LOAN

, Car Loan etc.
Your investment and Savings.
Your Life Style Expenses.
Monies you would require in Future.

As a rule of thumb when you are buying your first Life Insurance Policy it is suggested that you should have a Insurance Cover of at least 5 to 10 times of your annual income.

There are many different scientific methods available to access the total Life Insurance Cover. The need for Insurance changes and increases with age depending on the combination of factors stated above. It is advised that one should review his Insurance needs every 3 years. Every individual is different and his needs are different and one set of rules for Insurance cannot be applied to all. A good Financial Planner or Advisor in your neighborhood should help you ascertain your appropriate Insurance Cover.

Life Insurance is a very important and integral part of Financial Planning for the Future.

Have a Financial Goal and Make a Financial Plan to reach your Goal, Insurance products can help you achieve your financial goal. Review your Financial Plan once in a year and assess you Insurance needs.

THNX N REGARDS

MANISH SINGH
start_blog_img