Insurance & Wealth Management

Insurance & Wealth Management

Insurance is a contract that provides compensation for losses in exchange for a one time or periodic payment. An individual contract is known as an “insurance policy” – Periodic payment is known as an insurance premium. A group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In case a person suffers a loss on account of such risk, s/he is compensated out of the same pool of funds. Insurance provide protection against financial losses. A lot of Insurance products presently provide good returns which could be a beneficial way for saving necessary funds for retirement years and can help secure the future of children’s education. A tax rebate is also available with insurance.

Types of Insurances

There are 2 major categories of insurance: General Insurance and Life Insurance.

General Insurance

This is a form of insurance mainly concerned with protecting the policyholder from loss or damage caused by specific risks. Classification is done based on the need level – Property/casualty insurance, health and disability insurance, business and commercial insurance, agricultural, aviation, car insurance, fire, marine, and travel insurance.

Life Insurance

It is a contract between the insured person and the company that is providing the insurance. It offers a way to replace the loss of income that occurs when the insured person dies, If the death of the insured occurs while the contract is in force, the insurance company pays a specified sum of money free of income tax to the person named as beneficiary. It can also be a form of savings in the long run where there is the option of contributing regularly.

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