Products > Insurance

What is Insurance?

To insure means to provide a cover against any accidental loss of a financially valuable, life or non-life, asset like a car, home, business, etc by making a periodic payment to an insurer. One can also cover losses or expenses resulting from health problems or accidents faced by an individual.

An insurer is the party that promises to compensate for the loss in exchange of a basic predetermined amount, also known as a premium. In addition, the insured agrees to abide by certain terms and conditions put forward by the insurer.

Most of the insurance providers charge a small amount that covers you against a certain eventuality. In case of an unexpected loss, the insurance proceeds in the form of lump sum amount help in reducing the financial consequences arising out of the loss.

Types of Insurance

Insurance can be bought for anything that a person/ entity wish to cover. The most common types of insurance are

  • Life Insurance
  • Mediclaim/ Health Insurance
  • Auto Insurance
  • Home Insurance
  • Disability Insurance
  • Business Insurance

Life Insurance

Life Insurance is a means to cover (financially) ones family after the death or permanent disability of the earning member. This helps in insuring that the dependents continue to receive some form of adequate financial support.

How It Works

When you buy a life insurance cover, an insurance company decides how much premium they will charge. The calculation is based on your age, lifestyle, financial situation, health status, future financial requirements, insurance amount (Sum Assured), and the term of the insurance.

It is possible that the policy be denied altogether if they find a substantial risk discovered via investigations of your medical background or credit history. Critical factors considered are age, sex and any pre-existing medical conditions.

Sum Assured

The insurance amount to be paid after the death/ disability of an individual is called Sum Assured. This amount is decided based on the current income and expenses of the household. The insured has the option to select the Sum Assured as per his/ her requirements. It is advisable to opt for 10 times the current annual income of the person whose life is being insured.


The regular payment made for the insurance is called Premium. This amount can be paid annually, semi-annually, or monthly. In some cases, the insured has an option to discontinue paying the premium or enjoy a premium holiday. One might completely discontinue (surrender) the insurance if he/ she is unable to pay the premium.


The period for which insurance is availed is called the Term. It can be for a fixed period or even for the Whole Life.