Various types of Insurance Policies.

Now coming to the various types of insurance policies or I to be as brief as possible in this because I need to cover a large amount of information in a short amount of time just to make the topic easier for you all.

Various types of Insurance Policies.

Life insurance 

So, firstly life insurance 

A whole life policy 

In case of a whole life policy the insurance plan you will be able to get compensation upon the insured person's death. 

let's say in my case if I happen to die at the mortality rate of 60 my family is able to get it as soon as I happen to die so that's a case of a whole life policy. 

Endowment policy

Endowment policy refers to a policy which has a particular number of years and the eventualities should occur in that particular number of years so that's what you would refer to as an endowment policy. 

Joint life policy

Joint life policy is a type of insurance policy which is taken by two or more persons let's say a father who take a joint life policy for his wife and for his child. 

Annuity policy

And then you have an annuity policy the word annuity if you're a mathematics student and UT here refers to equal amounts of money being given back in equal intervals of time.

 

There are many insurance policies which they also refer to as a money back policy or a cash back policy Baron. 

Let's say you make the insurance policy we need the investment today around five years from now and in intervals of five years a certain amount of money is in fact returns back to your account it's a form of savings for many people so that's what you refer to as an annuity policy dumb assurance. 

Term assurance

Term assurance is a type of insurance policy which is very very similar to endowment we're in if the eventualities occurs within the particular number of years then you are able to get that compensation if it occurs after that particular term you don't get anything.

Children's deferred insurance

Now, Children's deferred insurance this is an extremely popular type of insurance mainly introduced by UTI.

 

Now how does it work the parents should go about investing in an insurance policy right now and the returns are given to back to them when the child turns 18 or say 21 depending upon the policy.

They have now this is a great way to save for the child's future say for their college education or for their future for their financial security for any of that if you want to save this is one type of a policy which is in fact extremely popular for that.

Policy with profits and Policy without profits

And then you have policy with profits and policy without profits. 

Policy with profits are also referred to as unit length insurance plans wherein the premium that you would invest in an insurance company is in fact used to used to how do I say this it's used to put money into the stock market your premium is in fact taken and is in fact invested in the stock market.

Now this is done for a large period of time I'm 26 now if I were to invest in a unit my premium every year would be in fact invested in the stock market. 

Now would usually get these returns save and I am 60 years old now from now to 60 years old the stock market is going to move up and down continuously, in fact it's a very volatile system so what happens here is let's say the stock market does extremely well when I was 40 years old. 

Now how well it does when I am 40 let's say I'm able to get a return of 20% when I'm 40 this high rate of return which I get in one particular year is what I'll be getting but when I am going to retire. 

Let's say at the age of 16 the market is doing quite badly where I am getting I'm going to get only 8% rate of the tunnel juleps work in such a way that in that period of investment whichever period had the highest rate of return that is something which they are going to give you back.

This is one of the reasons why they're one of the most popular forms of investments policy without profits like the name says you don't get anything extra you're not able to get any compensation out of the investment. 

It's just like any other regular insurance plan and you just save for the future okay policy with profits you are able to get the benefit of the stock market. 

Group Insurance

And then you have group insurance,

Extremely popular if you are in the corporate world this is one of the very famous benefits which companies give to their employees it's a way to keep them more motivated. 

Janata policy

And then you have Janata policy these are the types of insurance policies where the value of the premium is in fact just a few hundred rupees and of course the compensation as well is in the range of a lakh or two lakh rupees. 

The only advantage is it's able to protect the risk of the minorities it's able to in fact make people aware of something like insurance and get the benefit of risk protection at a very very low price. 

like I said the premium on this is just a few hundred rupees per annum in comparison to a regular life insurance premium which could run to in fact tens of thousands per annum.

 

Fire Insurance

Now moving on from life insurance to fire insurance specific policy fire insurance before I get to the types fire insurance is always taken for property. 

Now in case property were to be damaged from the fire you're going to get compensation from the insurance company because the goods have been damaged due to the fire and remember the compensation is given only if you made adequate arrangements in order to reduce the chances of a fire. 

In case the fire was intentional as they call it as arson you will not be getting any compensation in that case.

 

So what are the different types of fire insurance policies. 

Specific Policy

Firstly, you have specific policy where in a specific asset is insured this is very common in case of a museum where you have artifacts which are in fact extremely valuable. They would end up taking an insurance policy on each of these artifacts. 

Comprehensive Policy

Comprehensive policy covers a variety of risks. 

It covers a variety of recipie could cover even life in fact that is in case a person were to die from a fire you are not discovered in case of a comprehensive policy loading policy. 

let's say you have a type of policy wherein you are going to consider the various properties that you have across the country. various properties that you have across the country in that case you are going to take up a fire insurance policy not just on one property but you're going to take it upon multiple properties 

You do that because you want to make sure that you get the benefit of insurance throughout the places where you're doing business in that case you end up taking a floating policy. 

Replacement or a Reinstatement policy. 

If you remember the concept of subrogation I told you that property which has been damaged has in fact replaced by the insurance company in this case you have the property in fact being replaced because the fire has ended up damaging this of course remember this is not possible in case the property which has been damaged is unique or one-of-a-kind. 

In that case the only thing they could do is end up giving you a financial compensation and not really replace something which is in fact a unique or one-of-a-kind. 

Valued Policy

Then you have valued policy in a valued policy the property is valued when the insurance policy is taken up itself. 

now, 

right now the home I am currently staying has got a market value of around 60 lakhs okay now that is of today February 10th 2014 it's worth 60 lakhs. 

Now I'm sure the value of this property is going to increase over a course of time now let's say a fire were to happen in this place after about say five years from now. 

In 2019 a fire is going to happen if I have taken up a fire insurance policy today and the fire insurance happens and the fire happens five years from now the insurance company will end up giving me only 60 lakhs because a valued policy is what is the value of the property as of that particular date. 

So even if the fire happens in 2019 when the property value is in fact quite high I'll still end up getting the value of the property only as of 2014 unvalued policy the other way around you are able to get the value of the insurance claim based on the present day market value not on what is decided on a previous day. 

Loss of Profit Policy

Then you have loss of profit policy now a loss of profit policy is a type of policy where in now if you remember the Russell market file a lot of the traders in fact were unable to do business for several days.

Why were they unable to do business for several days, now the reason was after the fire had happened these guys were had to get their business back together by replacing whatever has been damaged removing the debris putting up the new shelves getting the inventory. 

All that now this would have taken them at least a month now an entire month they've been unable to do any business at all because they've not been able to do any business for an entire month. 

Whatever are the profits that they could have made that's what the insurance company would compensate them for now remember here this is not like any you're not making any jackpot win. 

Here you could have been doing business normally if circumstances not altered due to the file now rather than selling goods like you would do usually you are getting compensation from the insurance company in a loss of profit policy.

 

Marine Insurance

Moving on to marine insurance in case of marine insurance you have wide policy. 

Marine insurance is in fact a type of insurance which is usually taken in case of foreign trade so the 

Voyage Policy

First type of policy that you have there is voyage policy which policy covers a insurance based on a particular amount of distance that is how many nautical miles do you have to take in in order for the policy to be valid. 

Let's say you have an insurance policy for say 100 nautical miles now the ship is considered to travel 100 nautical miles if it were to cross beyond that any damages that were to occur beyond that distance that they travel that's something which the insurance company would not compensate. 

This is very very similar to the warranty that you have on your automobiles where in they say twenty thousand kilometres or thirty thousand kilometres until then you have free service and that's the similar way in which this insurance works as well. 

Time Policy. 

The amount of days or the number of days it actually takes for the ship to reach its destination and the insurance policy can be made valid for that number of days. 

Mixed Policy 

A combination of the two valued policy and unvalued policy exactly as what I said for fire insurance no different here at all but just that the same concept is implemented for marine insurance.

Wagering Policy

Then you have wagering policy now wagering policy here refers to a type of policy which is given just for the sake of satisfying the customs.

Guys what that means here is the customs will not allow you to send these Goods out of the country if you are able to if you are not having any insurance with you insurance is mandatory. 

However let's say you are unable to afford the insurance you get more or less a policy which is a dummy policy. 

This is perfectly legal you are just showing the customs look I have a policy but in reality if any damages were to occur to your property which are sending across for foreign trade you will not be getting any compensation for this now.

This is what you would refer to as a wagering policy or an honor policy. You are not going to get any compensation remember you are getting a policy just for the sake of making sure the customs I love you too send these goods out of the country. 

Floating Policy

Then you have a floating policy a floating policy is a type of policy where an one insurance policy is valid for multiple trips.

Now a ship would be traveling to and fro from to the same location multiple times so in order to avoid taking insurance policies continuously you have one policy that's able to cover multiple journeys of the same ship of course. 

Block Policy

Block policy is a type of policy wherever from the time you dispatch the goods from the manufacturing plant you send it through say roadways railways until it reaches the port.

And even after when it go leaves the port and goes to its destination the policy continues to be valid so your marine insurance although the word marine is there is in fact valid right from the manufacturing point itself.

 

So that's what you refer to as a block policy now there are other types of marine insurance as well like you have one which is known as shipbuilders risk policy as well okay. 

And you even have special hazards policy in case you have pirates and everyone attacking you shipbuilders policy like the name says any damages were to happen during the construction of a ship 

The insurance company is able to compensate you for this okay, 

I hope the topic was clear and  in case you have any doubts with any of the concepts here you are welcome to go about leaving questions comments in the section below and I will get back to you immediately thank you.