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Insurance, a contract between an individual (policyholder) and an insurance company, where the policyholder pays regular premiums in exchange for financial protection against specific risks or losses. The insurance company agrees to provide compensation or coverage for certain events or damages as defined in the policy, which helps reduce the financial burden on the insured in case of an unfortunate event.
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Risk Management: Insurance helps manage financial risks from unexpected events by pooling resources from multiple policyholders.
Premium Payments: Policyholders pay regular premiums in exchange for coverage, with the amount varying based on risk factors.
Types of Insurance: Includes health, life, auto, property, liability, and more, each offering specific coverage.
Coverage: Policies outline what is covered, exclusions, limits, and deductibles, detailing what financial protection is provided.
Claim Process: Policyholders file claims when a covered event occurs, and the insurer compensates based on the policy terms.
Policy Terms: Includes the policyholder, beneficiaries, underwriting, and renewal conditions.
Benefits: Provides financial protection, peace of mind, and legal compliance while managing potential financial losses.
Insurance and Investments: Some insurance policies, like life insurance, also serve as investment tools, providing both coverage and potential returns.
Life insurance, a critical financial tool that offers security and peace of mind to individuals and their families. By providing financial protection against the loss of the policyholder’s income or assets, it ensures that loved ones can maintain their standard of living even after their death.
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Premium Payments: Regular payments made by the policyholder to the insurer in exchange for coverage.
Beneficiaries: Designated individuals or entities who receive the death benefit
Types of Policies:
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Term Life: Coverage for a specific period; no payout if the policyholder survives.
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Whole Life: Lifelong coverage with a cash value component.
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Endowment: Combines life insurance and savings, paying a lump sum on death or survival.
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ULIPs: Combines life coverage with investment in financial markets.
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Money-Back: Provides periodic payouts during the policy term along with the death benefit.
Coverage Amount: The sum assured or death benefit paid to beneficiaries.
Policy Riders: Additional coverage options like accidental death or critical illness.
Cash Value: Some policies accumulate cash value that can be accessed or borrowed against.
Tax Benefits: Premiums are tax-deductible (Section 80C) and death benefits are tax-free (Section 10(10D)).
Loan Facility: Loans can be taken against the policy’s cash value.
Surrender Value: The amount received if the policy is discontinued before maturity.