The broad classification of insurance types is shown in the following diagram.
1. Life Insurance:
It is a contract where the insurance company agree to pay a particular sum of money to the insured on expiry of certain time or on the death of the person whose life is assured. Life assurance may be:
- Term Policy: Term Insurance can be defined as “a policy in life insurance may be defined as a contract that furnishes life insurance protection for a limited numbers of years, the face value of the policy being payable only if death occurs during the stipulated term, and nothing being paid in case of survival” .
- Whole Life Insurance: Here the sum is payable only on the death of the insured or assured and the premium is throughout the life of the policy at a regular interval .
- Endowment Insurance: In this case, the sum assured is payable on the death of the insured or a fixed period of time which is earlier and premium are payable only for a fixed period of time as per contract.
- Money Back Policy: Money back policy offers periodical payments of fractional survival benefits the term of the insurance policy, only if the insurance holder is alive. In the money back policy, the death claim includes the entire assured sum in case any death incident occurred.
- Annuity: An annuity is a periodical level payment made in exchange of the purchase money for the remainder of the lifetime of a person specified period.
- Unit Linked Insurance Policy (ULIP): A Unit Linked Insurance Plan (ULIP) is a life insurance plan, which offers the dual benefits of protection as well as savings. The protection component is the insurance cover while the saving component is that portion of the premium that is invested by the insurance company on your behalf in a fund of your choice. The first one is called Death benefit and the second one, Maturity Benefit.
- General Insurance: It is a contract of indemnity whereby the insurer undertakes to pay compensation to the insured for the actual loss only. If the loss does not occur, the payment need not be made.
2. General insurance
General insurance is of the following types:
- Health and Medical Insurance: The term ‘Health Insurance’ relates to a type of insurance chat essentially covers your medical expenses. A health insurance policy is a contract between an insurer and an individual/ group in which the insurer agrees to provide specified health insurance cover at particular “ premium” subject to terms and conditions specified in the policy.
- Property Insurance: provides protection for properties like home, car and house-hold possessions. It may also protect from liability as a result of their use.
- Liability Insurance: Public liability insurance covers any damage caused by the insured to a customer’s (third party) property, e.g., if you were a carpet fitter and knocked over an expensive vase while carrying your carpet in then this is when your liability insurance would come into effect.
- Marine Insurance: It is contract to make good any loss due to marine adventure and transport.
- Fire Insurance: It is a contract where the cars are covered for theft, damage, etc. In case of a third party injury the compensation to the third- party is also payable by the insurance company.
- Motor Insurance: It is a contract where the cars are covered for theft, damage, etc. In case of a third-party injury the compensation to the third-party is also payable by the insurance company.
- Accident Insurance: It is contract to make good the loss due to physical injury, or damage of property due to any accident.
- Credit Insurance: Credit insurance pays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death.
- Fidelity Insurance: It is a special insurance for special business mainly financial business.
- Burglar Insurance: It is contract whereby the loss is made good for dacoity and burglary.
- Workmen Compensation Insurance: It is an insurance where the insurance company pay on behalf of employer, any compensation paid to employees, who have lost their life, limb or any part of the body during and in course of employment.
- Unemployment Insurance: It is a contract of paying a certain sum of money to the insured during his tenure of unemployment for sustaining basic minimum of life.
- Cash Transit Insurance: It is a contract covering of theft, dacoity of cash when moved from one location to another.
- Employment Liability Insurance: It is an insurance for the employer for its statutory liability for the payment of corporation to the employers.