types of insurance ppt

1. Types of Insurance

2. Life Insurance
 Life insurance policies provide protection against
unforeseen circumstances such as the policyholder's
death or incapacity. Aside from providing financial
security, many types of life insurance plans enable
policyholders to optimize their savings by making
recurring payments to various equity and debt fund
alternatives.

3. Types of Life Insurance
 Mortality (Term plans): The most basic and
affordable insurance, term plans or protection plans
cover the core risk of loss of income due to a
breadwinner’s demise. The policyholder pays
premiums towards a coverage amount, which is paid
to the nominees in case of their death. If they survive
the term, there is no pay-out. Today, term plans offer
various options, such as spouse cover, return of
premium, protection against critical illness and
death or disability by accident.

4.  Risk always comes unannounced. It is advisable for
anyone having a family history of critical illness to
get insured against the same. Healthcare is getting
expensive, and this plan will protect your savings
and keep your family financially secure.

Morbidity (Accidental Death and Critical Illness Plan):

5. Longevity plans:
 With increasing life expectancy, your post retirement
years could be as long as your employment years.
Annuity plans offer the dual benefit of investment
and insurance. They guarantee a regular stream of
income to ensure that you live your golden years
comfortably, without compromising on your
standard of living. Similarly, whole life plans offer
coverage up to 99 years of age, guaranteed pay out,
death benefit, survival benefit, and policy maturity
benefit if the policyholder lives past 99 years.

6. Market Volatility (Par products like
ULIPs):
 Participating or par products offer financial security
against market volatility. They may not offer a
complete guarantee, but they enhance your savings
with the profit-sharing benefits, as and when the
insurance company makes good return in their par
fund.

7. Guaranteed returns (Non-par products
like Endowment plan and Money Back
plan):
 These plans give you guaranteed returns and life
cover for the entire policy term. Endowment plans
offer the double benefit of savings and insurance,
making it ideal for building a corpus for future
aspirations. It also offers a death benefit, maturity
benefit, and a bonus, if applicable.
 Money back plan is similar to an endowment plan,
except that money back plans offer liquidity. You can
claim a percentage of the sum assured at regular
intervals, instead of a lump sum when the policy
matures, or as a death benefit.

8. Types of General Insurance
 General insurance covers aspects that are not related
to human life, such as home, vehicle, health, and
travel. It even offers financial protection from
disasters caused by man-made and natural disasters
like floods, fire, thefts, accidents, and environmental
events. General insurance plans are important as
they protect your most valuable assets.

9. Motor insurance:
 Motor insurance covers any and every kind of vehicle
and cannot be avoided as it is a legal necessity. It
covers loss related to accidents, natural calamities,
thefts, or violence. There are two kinds of motor
insurance:
• Third-party insurance, which covers and
compensates you for any third-party loss
• Comprehensive insurance, which not only includes
third party coverage but also any loss or damage to
your vehicle and you.

10. Home insurance:
 This protects your home and your valuables from
any natural or man-made disasters.

11. Health insurance:
 This covers medical and hospitalization expenses,
which shields you from escalating and exorbitant
healthcare costs. There are different policies that
cover critical illnesses, cancer, cardiac conditions,
accidents, and other ailments. You can even choose
between an individual, group, or family plan to get
adequate coverage at a reasonable cost.

12. Travel insurance:
 This is a must for travelers, especially during
international travel as it covers hospitalization or
medical expenses, compensation for delayed or lost
baggage, theft, loss of passport, flight delays and
cancellations and more

13. Life V/S General Insurance
Life Insurance General Insurance
Cover
Life insurance covers an individual’s life
and fixed health benefits like critical
illnesses e.g. Cancer, heart ailments etc.
General insurance covers non-life assets,
such as houses, vehicles, health, events,
travel, and more.
Compensation
In case the insured dies during the policy
term, the nominees receive the sum
assured. Some plans pay this to the
policyholder if he or she outlives the
policy maturity.
Compensation is paid only if there is loss
or damage to the house or car, during
travel, or in case of hospitalisation for
medical emergencies.
Premium
You pay a fixed premium depending on
the coverage amount and this does not
change during the premium payment
period.
The premium charged depends on many
factors of the asset insured. For e.g.,
medical insurance premium will depend
on medical history, habits, profession,
and other lifestyle parameters.
Premium Payment Term
This can be paid annually, half-yearly,
quarterly, monthly or as a lump sum.
The premium has to be usually paid as a
lump sum.

14. Premium Payment Term
This can be paid annually, half-yearly,
quarterly, monthly or as a lump sum.
The premium has to be usually paid as a
lump sum.
Tenure
Life insurance policies are long term
policies which can continue for up to 99
years of age, depending on the plan.
These are typically annual policies and
can be renewed if required. However,
they must be renewed within the
stipulated time to avoid lapsation.
Repayment Amount
The sum assured is paid out to the
policyholder’s nominees, provided all
terms and conditions have been
complied with.
In general insurance, the payout is called
sum insured. This amount is paid out if
the insured asset is lost or damaged.
Beneficiary
The beneficiary can be anyone the
policyholder nominates to receive the
benefits in case of their death. For post
maturity, the beneficiary can be anyone
including the policyholder.
The policyholder is mostly the
beneficiary

15. How Underwriting and Approval Process Differs
Between Life Insurance and General Insurance
 Complexity of underwriting: Life insurance
policies typically involve a more complex
underwriting process than general insurance
policies. This is because life insurance policies
require a more thorough assessment of the
policyholder’s health, lifestyle, and other risk factors
to determine the appropriate premium and coverage
level.

16.  Length of underwriting process: The
underwriting process for life insurance policies can
take longer than for general insurance policies
because of the need to collect and analyse more
detailed information. It can take several weeks to
several months to complete the underwriting process
for a life insurance policy, whereas general insurance
policies can often be approved within a matter of
days.

17.  Medical exams: Life insurance policies often
require a medical exam as part of the underwriting
process, whereas general insurance policies typically
do not. The medical exam provides the insurer with
additional information about the policyholder’s
health and helps them to determine the appropriate
premium and coverage level.

18.  Risk assessment: The underwriting process for
general insurance policies typically focuses on
assessing the risk associated with a particular event
or asset, such as a car accident or property damage.
In contrast, the underwriting process for life
insurance policies is focused on assessing the
policyholder’s overall risk of death or disability and
the likelihood of a claim being made.

19. How Claims Process Differs Between Life Insurance
and General Insurance
 Documentation: The claim process for life
insurance typically requires fewer documents
compared to general insurance. For life insurance,
the beneficiary usually needs to provide a death
certificate and proof of identity, while general
insurance claims may require a range of documents,
such as police reports, medical bills, and repair
estimates.

20.  Investigation: General insurance claims often
require an investigation into the circumstances of the
claim, such as whether an accident was caused by
negligence or whether the loss was due to a covered
event. Life insurance claims, on the other hand,
usually do not require extensive investigation, as
long as the cause of death is covered under the
policy.

21.  Payment: Life insurance claims are typically paid in
a lump sum to the beneficiary, while general
insurance claims may be paid out in installments or
as reimbursement for expenses incurred.
 Timelines: Life insurance claims are usually
processed and paid out faster than general insurance
claims, as the cause of death is often straightforward,
and the beneficiary is typically designated in the
policy. General insurance claims can take longer to
process, especially if there is an investigation
involved or if the claim is disputed.
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