Types of Insurance

Types of Insurance
Life Insurance General Insurance
Term Money- Unit-Linked Pension Motor Home Health Fire
Life back policy Insurance Plan Plans Insurance Insurance Insurance Insurance

What is Life Insurance

Life insurance is a contract that offers financial compensation in case of death or disability.
Some life insurance policies even offer financial compensation after retirement or a certain
period of time. Life insurance, thus, helps you secure your family’s financial security even in
your absence. You either make a lump-sum payment while purchasing a life insurance policy or
make periodic payments to the insurer. These are known as premiums. In exchange, your insurer
promises to pay an assured sum to your family in the event of death, disability or at a set time.

Life insurance can help you support your family even after retirement. Depending on what it
covers, Life insurance can be classified into various types:

- It is the most basic type of insurance.

- It covers you for a specific period.
Term Insurance - Your family gets a lump-sum amount in the case of your death.
- If, however, you survive the term, no money will be paid to you or your
family.
- It covers you for a lifetime.
Whole Life Insurance - Your family receives a certain sum of money after your death.
- They will also be entitled to a bonus that often accrues on such amount.
- Like a term policy, it is also valid for a certain period.
- A lump-sum amount will be paid to your family in the event of your
Endowment Policy
death.
- Unlike a term plan, you get the maturity proceeds after the term period.
- A certain percentage of the sum assured will be paid to you periodically
throughout the term as survival benefit.
- After the expiry of the term, you get the balance amount as maturity
Money-back Policy
proceeds.
- Your family gets the entire sum assured in case of death during the
policy period. This is regardless of the survival benefit payments made.
- Such products double up as investment tools.
- A part of your premium goes towards your insurance cover.
Unit-linked Insurance
- The remaining amount is invested in Debt and Equity.
Plans (ULIPs)
- A lump-sum amount will be paid to your family in the event of your
death.
Child Plan - This ensures your child’s financial security.
- In the event of your death, your child gets a lump-sum amount.
 - The insurer pays the premium amounts after your death.
- Your child will continue to get a certain sum of money at specific
intervals.
- This helps build your retirement fund.
Pension Plans - You can get a regular pension amount after retirement.
- In the case of your death, your family can claim the sum assured.

What is General Insurance?

A general insurance is a contract that offers financial compensation on any loss other than death.
It insures everything apart from life. A general insurance compensates you for financial loss due
to liabilities related to your house, car, bike, health, travel, etc. The insurance company promises
to pay you a sum assured to cover damages to your vehicle, medical treatments to cure health
problems, losses due to theft or fire, or even financial problems during travel.

Simply put, a general insurance offers financial protection for all your assets against loss,
damage, theft, and other liabilities. It is different from life insurance.

Types of Insurance

Risk is everywhere: When you drive your car to work, when you visit a new country, when you
ride your bike to a nearby shop, when there’s a new bug going around in town.

Bottomline: You need the security of insurance.

There are two broad types of insurance:

 Contents [show]

Life Insurance
 General Insurance
What are the types of General Insurance available? / What
all can be insured?
You can get almost anything and everything insured. But there are five key types available:

1. Health Insurance
2. Motor Insurance
3. Travel Insurance
4. Home Insurance
5. Fire Insurance
Health Insurance
This type of general insurance covers the cost of medical care. It pays for or reimburses the
amount you pay towards the treatment of any injury or illness.

It usually covers:

 Hospitalisation
 The treatment of critical illnesses
 Medical bills prior to or post hospitalisation
 Day care procedures like Cataract operations

You can also opt for add-on benefits like:

 Maternity cover: Your health insurance covers you for the costs related to childbirth. This
includes pre-delivery check-ups, hospitalisation during delivery, and post-natal care.
 Pre-existing diseases cover: Your health insurance takes care of the treatment of diseases you
may have before buying the health insurance policy.
 Accident cover: Your health insurance can pay for the medical treatment of injuries caused due
to accidents and mishaps.

Motor Insurance
Motor insurance is for your car or bike what health insurance is for your health.

It is a general insurance cover that offers financial protection to your vehicles from loss due to
accidents, damage, theft, fire or natural calamities

You can also get motor insurance for your commercial vehicles.

In India, you cannot drive or ride without motor insurance.

Let’s look at the two key types:

1. Car Insurance

It’s precious—your car. You paid lakhs of rupees to buy that beauty. Even a single scratch can
be painful, forget about bigger damages.

Car insurance can reduce this pain for a few thousand rupees.
What the insurer will pay for depends on the type of car insurance plan you purchase

2. Two-wheeler Insurance

This is your bike’s guardian angel. It’s similar to Car insurance.

You cannot ride a bike or scooter in India without insurance.

Travel insurance
A travel insurance compensates you or pays for any financial liabilities arising out of medical
and non-medical emergencies during your travel abroad or within the country.

There are two types of Travel Insurance.

Single Trip Policy Annual Multi Trip

It covers you during a trip that lasts under 180 It covers you for several trips you take within a
days. year.

What all does travel insurance usually cover?

 Loss of baggage
 Emergency medical expenses
 Loss of passport
 Hijacking
 Delayed flights
 Accidental death

Home Insurance
Home insurance is a cover that pays or compensates you for damage to your home due to natural
calamities, man-made disasters or other threats.

It covers liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage. It not only offers
financial protection to your home, but also takes care of the valuables inside the property.

Some of the common types of home insurance are:

This covers your home against fire outbreaks and special perils.
The dangers covered are:
Standard fire and special - Natural calamities like lightening, flood, storm, earthquake, etc.
perils policy - Damage caused due to overflowing or bursting of water tanks, pipes,
etc.
- Damage caused due to man-made activities such as riots, strikes, etc.
 This protects the structure of your home from any kinds of risks and
damages.
Home structure insurance
The cover is also extended to the permanent fixtures within the house
such as kitchen and bathroom fittings.
The damage caused to another person or their property inside the
Public liability coverage
insured home can also be compensated.
This covers the content inside the insured home.
Content Insurance What’s commonly covered: Television, refrigerator, portable
equipment, etc.

Fire Insurance
Fire insurance pays or compensates for the damages caused to your property or goods due to fire.

It covers the replacement, reconstruction or repair expenses of the insured property as well as the
surrounding structures.

It also covers the damages caused to a third-party property due to fire.

In addition to these, it takes care of the expenses of those whose livelihood has been affected due
to fire.

Types of  Hotels or Classification of hotels by their type

Hotels are classified according to the hotel size, location, target markets, levels of service,
facilities provided, number of rooms, ownership and affiliation etc.

1. Size - Or number of rooms

Under 200 rooms

200 to 399 rooms

400 to 700 rooms

More than 700 rooms

The above categories enable hotels of similar size to compare operating procedures and
statistical results.

2. Target Markets
Hotel targets many markets and can be classified according to the markets they attempt to attract
their guests. The common type of markets includes business, airport, suites, residential, resort,
timeshare, casino, convention and conference hotels.

Business Hotels: These hotels are the largest group of hotel types and they primarily cater to
business travellers and usually located in downtown or business districts. Although Business
hotels primarily serve business travellers, many tour groups, individual tourists and small
conference groups find these hotels attractive. Guest amenities at business hotels may include
complimentary newspapers, morning coffee, free local telephone calls, Breakfast etc. 

Airport Hotels: These type of hotels typically target business clientele, airline passengers with
overnight travel layovers or cancelled flights and airline crews or staff. Some hotels might give
free transport between hotel and airport. Some Airport hotels also charge the guest by the hour
instead of normal daily night charges.  

Suite Hotels: These kind of hotels are the latest trend and the fastest growing segments of the
hotel industry. Such hotels have a living room and a separate bedroom. Professionals such as
accountants, lawyers, businessmen and executives find suite hotels particularly attractive as they
can work and also entertain in an area beside the bedroom.

Extended Stay Hotels: Extended stay hotels are somewhat similar to the suite hotels, but
usually offers kitchen amenities in the room. These kind of hotels are for long-stayers who want
to stay more than a week and does not want to spend on hotel facilities. 

Serviced Apartments: Serviced Apartment / Residential hotels provide long-term or permanent

accommodation for Guest. Usually guest makes a lease agreement with the hotel for the minimum of
one month up to a year. Rooms generally include living room, bedroom, kitchen, private balcony,
washing machines, kitchen utensils etc. Unlike normal hotels Serviced apartment only provide weekly
one housekeeping service.

Resort Hotels: Resort hotels are usually located in the mountains, on an island, or in some other
exotic locations away from cities. These hotels have recreational facilities, scenery, golf, tennis,
sailing, skiing and swimming. Resort hotels provide enjoyable and memorable guest experiences
that encourage guest to repeat to the resort.

Bed and Breakfast / Homestays: These are houses with rooms converted into overnight
facilities, this can size up to 1 to 10 guest rooms. They are also known as 'Home Stay's'. The
owner of the B&B usually stay on the premises and is responsible for serving breakfast to the
guest.

Timeshare / Vacation Rentals: Another new type or segment of the hospitality industry is the timeshare
hotels. These are sometimes referred to as " Vacation-interval" hotels. Timeshare hotels are where the
guests who purchase the ownership of accommodations for a specific period. These owners may also
have the unit rented out by the management company that operates the hotel. 
Casino Hotels: Hotels with gambling facilities are called Casino Hotels. Although the food and
beverage operations in the casino are luxurious their functions are secondary to and supportive of
casino operations.

Conference and Convention Centres: These type of hotels focus on meeting and conferences
and overnight accommodation for meeting attendees. They also provide video conferencing
facility, audiovisual equipment, business services, flexible seating arrangements, flipchart etc.
These hotels mostly located outside the metropolitan areas and have facilities like golf,
swimming pools, tennis courts, fitness centres, spas etc.

3. Levels Of service
World class service: These are also called luxury / Five Start hotels, they target top business executives,
entertainment celebrities, high- ranking political figures, and wealthy clientele as their primary markets.
They provide upscale restaurants and lounges, Valet, concierge services and also private dining
facilities. 

Mid-Range Service: Hotels offering mid-range or otherwise 3 to 4-star hotels service appeal the
largest segment of the travelling public. This kind of hotels does not provide elaborate service
and have a adequate staffing. They also provide uniformed service, food and beverage room
service, in-room entertainment's and also Wi-Fi etc. 

Budget / Limited Service: These hotels provide clean, comfortable, safe, inexpensive rooms
and meet the basic need of guests. Budget hotels appeal primarily to budget-minded travellers
who want a room with minimum services and amenities required for the comfortable stay,
without unnecessary paying additional cost for costly services.

4. Ownership and Affiliations

Independent / Single Owner Hotels: They do not have identifiable ownership or management
affiliation with other properties. Example of the same would be family owned and operated hotel
that is not following any corporate policies or procedures.

Chain hotels: Hotels which are part of a hotel chain and these kinds of ownership usually imposes
certain minimum standards, rules, policies and procedures to restrict affiliate activities. In general the
more centralised the organisation the stronger the control over the individual property .

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