What is insurance and how many types of insurance are there? 2022

Do you know what is insurance or insurance? Why we all need to insure our life or our property, while there are many types of insurance or insurance etc. If you have some doubts about insurance or insurance in your mind, then you must read this post till the end because today we will know about all the aspects of insurance.
As we all know that both life and property of any human being is surrounded by death, incapacity and ruin. No one knows what is going to happen to them the very next moment. At the same time, such accidents can cause you a lot of financial losses. At the same time, insurance is a very good way to protect yourself from such a situation, by which these risks can be removed to a great extent.
    Wherein the full responsibility of these risks from these insurance schemes is handled by the insurance company. Insurance protects us from many risks such as fire in the house, car accident, theft in the house. At the same time, there are some types of insurance which also provide money for the treatment of your disease, while on your death, this insurance amount is also offered to your family members.

    On the other hand, if you want to know more about what is insurance, then you will have to read this article completely about what is insurance. By which you will get complete information about it. Then without delay let's start.

    What is Insurance?

    Insurance is a kind of legal agreement between two parties, the first being the insurance company (the one who gives the insurance or the insurer) and the other is the individual (the one who takes the insurance or the insured).
    What is Insurance- 2022
    In this, the insurance company promises that if some untoward or accidental incident happens, then the company is going to take the responsibility of everything. At the same time, all the things that may have been damaged will be completed by the company itself.

    These types of events are called contingencies because there is no exact reason for these events as to when they are going to happen. In this , the insurance company has to compensate for all the losses as promised earlier.

    Principles of Insurance 

    When you buy an insurance from an insurance company, then the insurer (which is the company) and the insured (which is you) receives a legal contract of insurance, this is called an insurance policy.
    This insurance policy contains all the details about which you should know, such as all the conditions and circumstances under which the insurance company is going to pay you your insurance amount if there is any loss then, if not you then selected by you. Gone nominee.

    Insurance is a very good way to protect yourself and your family from any financial loss. It has often been found that the bigger the insurance cover , the smaller is the premium.

    This is probably because very few people claim this type of insurance but they have to pay all the premium for it. Therefore the company has more profit in it.

    Any person or company can apply to get insurance, but the insurance company decides what type of insurance is to be provided. For this, the insurance company evaluates your application thoroughly before giving you any decision.
    Whereas most of the time the comapny refuses to provide insurance to high-risk applicants.

    The issue with insurance is that you have to first choose what you need insurance on. After that the insurer calculates his risk , and only after checking everything tells you how much premium you will have to pay.

    1. Select Policy

    An insurance policy is such a document in which you have written all the details about it. Like for which things you get insurance and for what not.

    2. Pay Premium

    Premium is called the amount that you pay every month or once in a year according to your policy. Its amount depends on what things this insurance is covering.

    3. Claiming

    If something untoward happens within the insurance period, then you or your nominee can claim your insurance. In this you have to give full details of your accident which the insurance company checks and if your claim is correct from all the places then you get your claimed amount as was decided earlier.

    How many types of insurance are there 

    Although there are many types of insurance, but here we will know about some important types.

    1. Life Insurance

    As the name suggests, your life is insured in life insurance. You buy life insurance so that even if you are not there, your family is not dependent on anyone and you are financially secure yourself.

    Life insurance becomes very important for those people when you are the only earner in your family and the whole family depends on you.

    2. Health Insurance

    Health insurance is taken to cover the cost of medical treatments. In this also there are many types of health insurance policies which cover different diseases and ailments.
    You can also take a generic health insurance policy or you can also take a specific policy for any disease. The premium paid in this covers all types of treatment, hospitalization and medication costs.

    3. Car Insurance

    Similarly , you can insure your car with Car Insurance . If any accident is to happen then you get compensation for it.

    4. Education Insurance

    In this insurance, you are depositing money for the right education of your child and when the right time comes, you get a lumpsum amount for the education of your child.

    5. Home Insurance

    If you have built your house then you must buy home insurance because if there is any damage to your house, whether it is fire, any natural calamity or anything else, you get your compensation in everything.

    What tax benefits are also available by taking insurance?

    There are other benefits of taking insurance except safety, security benefits. With this you also get tax benefits.

    1. Life insurance premium that can also be claimed up to ₹ 1.5 lakh as a tax-saving deduction under section 80C
    2. Medical insurance premium up to ₹25,000 for yourself and your family, while ₹25,000 for your parents, you can claim a tax-saving deduction under section 80D

    You have to e-filing these claims at the time of filing income tax returns.

    How is Insurance Claim done?

    Let us now know how you can claim your insurance amount.

    1. For this you have to first make your claim against your insurance policy.
    2. Now you have to provide all the details regarding your loss which you have suffered. It differs from insurance to insurance.
    3. Then you have to submit all the bills / proof of your damage, loss, hospitalisation , etc.
    4. Now your work ends here, now the insurance company will verify your claim.
    5. Whereas if your claim is proved to be true then you get your claimed amount, according to your loss.

    Act of Insurance

    Insurance has evolved on the basis of a process that protects the loss and uncertainty of people. It is described as a social device to reduce the loss of life and property.

    Insurance promotes general economic growth in the society so that the process of society can run with stability in the right way. Insurance industries develop such financial institutions which help in reducing the uncertainties and risks in the future.

    1. Provide Safety and Security

    Insurance provide financial support and with it also reduce the uncertainties in business and human life. It provides safety and security against a particular event.
    Since there is always a fear of sudden loss, in such a situation, insurance has a big hand in reducing it.

    2. Generates financial resources

    Insurance generates funds, by collecting premium. These funds are invested in government securities and stocks . These funds are used in the industrial development of the country so that the economic development of the country can take place. At the same time, employment opportunities are also encouraged.

    3. Life Insurance Promotes Savings

    Insurance not only protects you from risks and uncertainties, but it also provides an investment channel. Life insurance enables us to make systematic savings on the basis of paying regular premium.

    Wherein life insurance also provides an investment mode.

    This creates the habit of saving money in us. The lumpsum amount of the premium, we get at the time of maturity according to the matured amount at the end. That's why it encourages to make insurance savings.

    Definition of insurance 

    4. Promotes economic growth:

    Insurance generates significant impact on our economy by mobilizing domestic savings. Insurance provides this accumulated capital with the form of productive investments.

    Insurance enables, mitigates losses, promotes financial stability and promotes trade, together with promoting trade and commerce activities, which ultimately provides economic growth and development. Therefore, insurance plays an important role in the sustainable growth of the economy.

    5. Medical support:

    Medical insurance is considered very important to manage the risk of heath. Because any one of us can fall ill at any time, which can cost a lot. On the other hand, if you have medical insurance, then it covers your big expenses, which can be of great help to you in such situations.

    6. Spreading Risk:

    Insurance helps in spreading our risk. By which it protects us from big losses.

    7. Funds Collect Has a Big Source:

    Large funds can be easily collected through premium. These funds can be used in the development of the country, which leads to economic growth of the country.

    Benefits of taking insurance

    By the way, insurance provides a lot of benefits to any individual, family businessman, businesses as well as society. At the same time, let us know about some of its important advantages: -

    1. Insurance provides economic and financial protection, to the insured person or thing that has been insured, that too in a nominal amount called premium.

    At the same time , it provides financial protection to the nominee if there is a pre-matured death of the insured person. Along with this, it also covers many losses such as loss of property due to theft, due to fire or any natural calamity.

    2. At the same time, it reduces the risks of people who otherwise could have caused big losses for them. Although it is not possible to completely remove the risks and uncertainties, but it can be reduced to a great extent. That's why insurance companies charge you a small premium to earn your risks.

    3. It helps in maintaining the standard of living of the people if there is such an unexpected loss. At the same time, it also protects us from unfortunate financial crisis.

    4. Since we have to pay some premium in insurance, for which it encourages us to save. Due to which saving becomes a habit of ours.

    5. It protects us from being dependent on someone else. So that you can live your life in your own way and empowers us. This life insurance policy provides us full financial support if someone dies.

    6. It also helps in taking loan. If you have any policy going on then you can take loan from insurance company on the basis of that policy. In which this policy is kept according to the collateral.

    7. It provides new employment opportunities for all. In this modern era, hundreds of entrepreneurs and thousands of employees are engaged in this line.

    8. Promotes Foreign Trade. Insurance companies have a big hand in promoting the international trade of a country. Because by insuring the risks of these businesses are greatly reduced, so that they can do the desired export activities of their businesses.

    9. Insurance companies have a big hand in operating the business smoothly. Because it divides the loss of properties. At the same time, the motivation of the employees is increased by getting the employees done through the insurance company.

    10. It helps in reducing inflation . To reduce inflation, the amount of money has to be reduced. At the same time, taking money from insurance companies on the basis of premium helps in reducing inflation.

    11. These premium amounts are spent in many development areas such as trade and industry. Due to which the economic growth of the country takes place.

    loss of insurance

    Know about the disadvantages of insurance.

    1. It does not compensate for all types of losses due to which it favors insurance people, through insurance companies.

    2. It takes a lot of time to provide Financial Compensation as one has to go through lengthy legal formalities in between.

    3. Although insurance encourages savings, but it does not provide as many facilities as are provided by the bank.

    4. They intentionally think of compensating the insurer at least so that their profit can be maximized.

    5. It also encourages crimes in the society, because most of the beneficiaries want to get the insured amount of the policy.

    6. Sometimes , the total amount of premium becomes more than the maturity amount.


    Whether it is any insurance, life insurance, health insurance or any general insurance, you can buy these insurance policies offline or online . Just as you can buy insurance from insurance agents in offline, similarly you can buy it online from many websites nowadays.

    The most important thing to note is that you should do complete research from your side before choosing insurance because you may suffer loss due to changing insurance later.

    what did you learn today

    I hope that you must have liked my article What is Insurance? It has always been my endeavor to provide complete information about the types of insurance to the readers so that they do not have to search any other sites or internet in the context of that article.

    This will also save their time and they will also get all the information in one place. If you have any doubts about this article or you want that there should be some improvement in it, then you can write low comments for this.