FAQ Schema Markup
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals. Know more

Kotak e-Term

Protect your family's financial future. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and life cover. Know more

Kotak e-Invest

Insurance and Investment in one plan. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

What is Insurance Coverage? Overview, Types, and Examples

Insurance coverage is the risk protection provided by insurance services to an individual. Read to know all about insurance coverage and the importance and types of insurance policies to opt for one

  • Nov 16, 2022
  • 7,004 Views

An insurance policy safeguards your future or your family’s future in a world full of unknowns. Insurance is a risk-mitigation tool that aids in the restoration of stability in one’s life. Having insurance benefits policyholders and their loved ones by allowing them to live a stress-free life. In the market, there are many different forms of insurance coverage. However, life insurance, medical insurance, and auto insurance are the most common.

If you’re thinking about purchasing a policy, this article will explain what is insurance coverage and the different types that are available.

All About Insurance Coverage

What do you mean by insurance coverage?

Insurance coverage is the risk protection provided by insurance services to an individual. An insurance policy helps a person or a company protect themselves from unanticipated events. It serves as a safety net, shielding policyholders and their loved ones from unforeseen circumstances. The policyholder must pay a small monthly or yearly premium to be covered by insurance for a set period. The insurance company will compensate for any financial losses incurred if the insured person or object is harmed.

Types of Life Insurance Plans

  • Term Insurance Plans
  • If something were to happen to you, term insurance safeguards the financial future of your family. A term plan, created as an easy and economical approach to provide financial protection, is an essential component of financial planning for the family’s main breadwinner. Term insurance is a market-unlinked, pure protection plan. Furthermore, term insurance has lower premiums than any other type of life insurance. If you purchase the premiums early in life, they are also more reasonable. Term plans are frequently recommended by experts as something you should prioritise as soon as you start making money. There are numerous uses for term insurance. Your family can utilise the insurance coverage to pay for daily necessities, educational fees, or wedding costs if you are unable to earn a living. Your family can use the cover to pay off any unpaid bills you may have, such as a home loan, auto loan, or other obligation.

  • ULIPs – Unit Linked Insurance Plans
  • An investment and insurance are combined in a unit linked insurance plan (ULIP). A ULIP offers life insurance that protects your loved ones financially. Additionally, it offers you the chance to make money through systematic investments that provide market-linked returns. Depending on your risk tolerance, a ULIP gives you the choice to invest your money in various fund options. A 5-year lock-in term is a requirement for ULIPs, and the funds can be invested in bonds, stocks, hybrid funds, etc. Bonds are an excellent option if you’re seeking for safer alternatives. Conversely, hybrid funds and stocks may provide superior returns if you are willing to take on more risk. Since every person is unique, ULIPs offer a lot of investment options. Your investment preferences and risk tolerance may alter as you get older. You are able to examine these elements and adjust your investment strategy as necessary using ULIPs. ULIPs also offer flexibility in terms of fund switching and partial withdrawals. They provide intriguing perks like wealth-boosters and loyalty additions to assist you accrue more wealth over time. Additionally, under Section 10(10D) of the Income Tax Act of 1961, the maturity amount from ULIPs is tax-free.

  • Endowment Insurance Plans
  • For those who desire the security of life insurance as well as returns that are guaranteed, endowment plans are the best option. An endowment plan is a type of life insurance that offers both regular savings opportunities and life insurance protection. This makes it possible for you to get a lump sum payment when the insurance matures. Your nominee(s) also receives a death benefit in the event of your passing during the insurance term. Endowment plans are quite flexible, just like ULIPs. To pay the premium, you can pick an appropriate method and window of time. Additionally, endowment plans allow you the opportunity to gain from bonuses, which are payments made in addition to the sum assured of your policy. Last but not least, under the conditions of Section 10(10D) of the Income Tax Act of 1961, the returns earned by an endowment plan at maturity are tax-free. Section 80C* of the same Act permits a deduction for the premiums paid.

  • Whole Life Insurance Plans
  • A whole life insurance plan is a type of life insurance that covers you for 99 years of your life. The long coverage period of these plans offers security for your family for a considerable amount of time, in contrast to other policies that have a relatively shorter term of 10 to 30 years. Whole life insurance is the best option for people who have financial dependents even in their advanced years because it offers coverage for up to 99 years. The primary benefit of this product is that it offers the insured both lifelong security and an easy option to leave a legacy for their offspring. Plans for whole insurance provide a lot of stability. After five years of premium payments, you will get a guaranteed income at maturity. A whole life insurance policy’s income is also tax-free* under Section 10(10D) of the Income Tax Act of 1961. /p>

  • Retirement Insurance Plans

Retirement plans are made to assist you in saving a sizable amount of money for your post-retirement years. In the years when you are not working, they aid in your financial independence. With the help of a retirement plan, you can save money aside and make long-term investments, increasing your chances of building up a sizeable fortune. By investing in retirement plans, which provide insurance benefits, you can also protect the financial stability of your loved ones. You have the chance to obtain potentially superior earnings with retirement plans. Your funds are invested in a combination of debt and equity to achieve this. Moreover, subject to Section 10(10D) of the Income Tax Act of 1961, the money you receive at maturity is tax-free. Last but not least, retirement plans give you a variety of alternatives for taking your money out, including regular income, a lump sum, or a mix of the two.

What does your Insurance Coverage include?

  • Life Insurance or Term Plan Coverage
  • Life insurance is a basic type of insurance policy for your life. It gets easier to comprehend this type after learning about insurance coverage. In case of an unforeseen eventuality, life insurance offers a financial safety net for your family. For example, life insurance coverage is critical if you are the sole earner in your family or if your loved ones rely heavily on your monthly income. If you, the policyholder, die within the policy’s term, a monetary payout is provided to your family to guarantee that they are taken care of.

  • Health Insurance Coverage
  • What do you mean by insurance coverage when it comes to health? Health insurance is purchased to cover the expenses of pricey medical procedures. Various types of health insurance coverage cover a variety of illnesses and conditions. In addition, you may purchase both general and disease-specific health insurance coverage. A health insurance policy’s premium normally covers treatment, hospitalization, and prescription bills.

  • Motor Insurance or Vehicle Insurance Coverage
  • In today’s society, with an ever-increasing number of people having vehicles, it’s more important than ever to have auto insurance. Moreover, with the rising number of incidents on the road every day, automobile insurance coverage meaning has taken on a new significance. Motor insurance is a specialised insurance policy designed to protect vehicle owners against financial losses incurred as a result of vehicle damage or theft. A motor insurance coverage can be purchased for a personal automobile, a business vehicle, or a two-wheeler.

  • Home Insurance Coverage

In case of a financial loss caused by your home, you are covered by home insurance. The coverage may cover the expenses of home repairs, damage, maintenance, or the replacement of damaged items. In addition, depending on the type of insurance, clothing, furniture, electronic devices, and other personal items may be covered. It comes very handy in the case of a fire, robbery, or other disasters. To summarise, you will be able to confidently decide what sort of insurance you need after knowing everything there is to know about what insurance is, insurance coverage meaning, and the four most important types of insurance to have.

How to find the Right Insurance Coverage?

  • Assess your needs carefully
  • To prevent your family from experiencing any financial hardship after your passing, you need life insurance. Therefore, the significance of life insurance cannot be disputed. Choosing the appropriate level of cover is quite important. Consider several factors, including the number of dependents you have, whether or not another family member is sharing financial obligations, whether you have young children whose education needs to be supported, or whether there is an upcoming marriage in the family, when giving this adequate thought.

  • The costs involved
  • When purchasing life insurance, you must take the cost into account, just like anything else in life. Examine the premium, administration and fund management costs, mortality fees, and available riders to determine how much you will need to spend for each. Before choosing the product that is best for you, be careful to compare those of a comparable type. There are several websites available nowadays that can help you compare plans and select the most affordable option for you. Make sure you have properly studied the fine print and are aware of what you are getting into before making your final decision.

  • Claim settlement ratio
  • The main reason to buy life insurance is to spare your loved ones from having to deal with financial hardship following your passing. The majority of individuals do not, however, give enough thought to what can occur if the insurance makes it challenging for your family to access the funds you have meticulously saved.

    Higher ratios indicate a more reliable insurer. Do not, then, be swayed by what an insurance representative may advise you or be drawn to policies with lower premiums just because they look more affordable.

  • Do not go overboard
  • Avoid buying too many plans that are out of alignment with your entire financial strategy. Life insurance policies should only be bought to protect your family. There are a number of alternative investment options you can take into consideration if you wish to reduce your taxes and stay within the parameters of section 80C.

  • Revisit your insurance needs

The golden rule of investing and creating a financial strategy is to frequently review your holdings. The same goes for periodically revaluating your insurance requirements. For instance, if you get married and add a child to the family, the insurance plans you may have bought when you were single may not be sufficient. Therefore, periodically review your insurance requirements to make sure your family is covered.

Frequently Asked Questions (FAQs)

What is Insurance policy?

The insurance policy, which establishes the claims that the insurer is legally obligated to pay, is a contract between the insurer and the policyholder. The insurer guarantees to cover damage brought on by dangers covered by the policy language in exchange for an upfront payment known as the premium.

What is insurance coverage limit?

The insurance limit, which is specified in your policy, is the most that your insurer will settle a claim for. Most insurance agreements, including those for auto and house, provide a variety of coverage categories with specific coverage limits.

What is insurance coverage law?

The term “insurance” refers to a legal agreement between an insurance business (the insurer) and an individual (the insured) under which the insured receives compensation for monetary losses brought on by unpredictable events for which the insured person has paid premiums.

What does your Insurance Coverage doesn’t include?

Prescription drugs, wellness services, medical equipment, and the majority of doctor and hospital visits are often covered by health insurance. Elective or cosmetic surgeries, beauty treatments, the use of drugs off-label, or brand-new technology are typically not covered by health insurance.

Kotak e-Term

Download Brochure

Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Important Terminologies of Life Insurance

Is It Time to Review Life Insurance Policy of Yours?

How do life insurance payouts work?

Know the many types of life insurance policies in India

Customer Awareness on Information Security

How to Customize Your Life Insurance Policy with Riders

Most Common Life Insurance Riders to Enhance Your Existing Policy

Want to surrender your life insurance policy? Here's a guide

Difference Between Insurance and Assurance?

Savings cum Protection Plans Secures Your Family from Unforeseen Events

1 CR Term Insurance Plan: How to Pick the Best 1 CR Term Plan

Different Kind of Deaths that are Not Covered in a Term Insurance Plan

What Is the Procedure to choose a nomination in life insurance policy?

Life Insurance with Money Back vs Without Money Back

Does Life Insurance Pay for Suicidal Death?

Advantages of Digitizing the Insurance Claims Process

Why is Medical Test Important While Buying a Term Insurance?

What Should One Consider Buying: Term Insurance or Traditional Life Insurance

What is Minimum Life Insurance Policy?

What Is Surrender Value (Cash Surrender Value) in Insurance and how is it calculated?

Best Insurance Plans in India

Do College Students Need to Buy a Life Insurance?

Insurance vs Investment - Know the Difference

Important Factors to Consider While Choosing the Right Term Period for Your Term Insurance Plan

भारत में जीवन बीमा पॉलिसियों के प्रकार

7 Superficial Reasons People Avoid Buying Insurance Online

Choosing Between Short-Term & Long-Term Insurance Plans

Is it Possible to Reduce Life Insurance Premium without Affecting Sum Assured?

Kotak Life Claim Settlement Ratio

5 Common Life Insurance FAQs and Answers

Life Insurance Plans for Women

What is Human Life value and a Human Life Value Calculator?

Does Life Insurance Policy Cover Covid Death?

FAQs on Life Insurance

Benefits of Term Insurance with Critical Illness Rider

All about Your Rights and Duties While Buying Life Insurance Policy

Who Is A Nominee In A Life Insurance Plan?

5 Things to Keep in Mind While Buying Life Insurance Policy

Whole Life Insurance Definition: How It Works, With Examples

How to Choose a Life Insurance Policy

Life Insurance for Millennials

What is Life Insurance?

Guidelines for Linking Aadhar and PAN to Insurance Policies

Why Life Insurance is Always a Smart Decision?

Different Types of Protection Plans

Benefits of Term Insurance for Senior Citizens in India

How Much Term Life Insurance Cover Do I Need?

6 Different Types of Insurance Policies

Top 5 Common Life Insurance Myths and Facts

Can You Apply For A Life Insurance After Getting Heart Attack? Here is Everything You Need To Know

Compare Different Life Insurance Products Offered By Kotak Life

All about Life Insurance Calculators

Term Life Insurance vs Accidental Death Insurance

Do Your Financial Planning with Life Insurance!

Life Insurance for Overweight Applicants

All About Life Insurance and How It Works?

Digital Life Certificate for Pensioners Seeking Pension

What Is Insurance Rider and It’s Benefits?

Is It Advisable To Have Multiple Life Insurance Policies?

What Is the Difference Between Group Term and Voluntary Term Life Insurance?

Life Insurance and Retirement Planning

How to Choose Life Insurance for All Ages?

क्या जीवन बीमा एक निवेश है?

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

Life Insurance for Overweight Applicants

Different Types of Insurance Policies in India

What Is Investment Insurance?

Why You Should Never Cancel Life Insurance Policy

Life Insurance vs Mutual Funds

Biggest Life Insurance Myths

What is Group Insurance?

Role of Life Insurance in Your Financial Portfolio

Life Insurance Vs. Mutual Funds Investment

Process of Filing A Claim For Life Insurance

How to Buy Life Insurance Policy Online?

All about IRDAI

What is KYC - Meaning, Types, and Importance

Adding a Child to Your Life Insurance Policy?

Is it Possible to Make Changes in a Term Plan’s Specification Post Purchase?

What is Underinsurance & The Dangers of Being Underinsured

5 Reasons Why a Women Should Buy a Life Insurance

Nominee in insurance - A Complete Guide on nomination in insurance

Does Family History Affects your Term Life Insurance Rates?

Life Insurance and Millennials

Should You Buy Life Insurance After Getting Married?

Difference Between Money Back and Endowment Policy

Can a Term Plan be the Substitute for a Retirement Plan?

Know the many types of life insurance policies in India

Important Life Insurance Terms You Must Know

Why Do Life Insurance Agents Avoid Selling Term Plans?

How to Select a Perfect Life Insurance Policy in India to Protect Your Future?

Beware of Phishing & Fraud Insurance Calls

How often should I review my policy?

Different Types Of Life Insurance In India

Backdating in Life Insurance: Should You Avoid it?

6 Ways You Can Ensure Fast & Smooth Claim Settlement

NRI Premium Payment Options

भारत में सर्वश्रेष्ठ टर्म प्लान कैसे चुनें?

Terminal Illness Benefit in Term Insurance

How Do Term Insurance Plans Differ for Smokers?

बीमा क्षेत्र में IRDAI की भूमिका

What is Insurance Premium? | Definition of Insurance Premium

Is Life Insurance Worth It?

Think About Life Insurance Sooner than Later

Can I Transfer My Term Life Insurance Policy to another Company?

Types of Riders in Insurance Policy

Everything You Need to Know About Endowment Policy

Term Plan with Return of Premium (TROP)

Term Insurance Vs Life insurance: Small Details, Big Differences

What happens to joint life insurance after divorce?

भारत में गृहणियों के लिए टर्म इंश्योरेंस

5 Easy Steps to Buying A Policy

Sabse Pehle Life Insurance

Staying Insured While Investing

How Much Life Insurance Should You Have?

Ensure Protection Against Death, Disease & Disability With Life Insurance

Comparing low premium term insurance Is Not the Only Factor While Buying Life Insurance

Life Insurance Nominees: 5 Must-Know Facts for Beneficiaries

What are the Benefits of Endowment Policy?

Loan Against Life Insurance Policy

Importance of Checking Claim Settlement Ratio before Buying Life Insurance

Tax benefit: Is your single premium life insurance policy eligible for tax benefits?

9 Most Important Things You Must Learn About Paying Life Insurance Premium

What is the Difference Between Limited and Regular Pay Insurance Plan?

Why Your Family Should Know About Your Life Insurance Policy?

6 Things You Didn't Know Life Insurance Could Do

Choosing a Life Insurance Beneficiary

Always keep your Nominee informed

Invest in Insurance to Secure Your Future

What are robo-advisors in insurance?

When are Millennials required to take out a life insurance policy?

Why Porting Health & Life Insurance after Marriage is Important?

Health Insurance VS Life Insurance

Voluntary Life Insurance vs. Basic Life Insurance

What Happens If You Stop Paying Premiums of Life Insurance?

How Many Insurances Should I Have?

Key Things to Review in Your Life Insurance Policy Document

How to Use Different Types of Life Insurance for Retirement Planning?

जीवन बीमा क्या है?

जीवन बीमा पर ऋण

How to Make Death Claims on Life Insurance?

How Does Life Insurance Work?

How to Choose the Right Term Plan as per Your Age

Details Required To Be Filled In A Life Insurance Form

What Should One Expect During the Medical Evaluation for Life Insurance?

What is the process of reactivating lapsed life insurance policy?

Life Insurance Beneficiary

Is Life Insurance For Millennials Really Needed?

Insurance and Endowment: Everything You Need to Know!

How Much Life Insurance Do You Need?

Here's How to Choose The Tight Life Insurance

What Is The Life Insurance Penetration In India And How Does It Compare Globally?

Why do I Need Life Insurance?

Choosing Riders for Insurance Plans

What is Human Life Value (HLV) & How to Calculate it?

What is the Difference Between Insurance and Reinsurance?

Why do most Indians choose the wrong way to buy life insurance?

Life Insurance vs. Death Insurance: Exploring the Key Distinction

Benefits of Gifting Term Insurance to Your Spouse

Role of IRDAI in the Insurance Sector

Health Insurance VS Life Insurance

Why Term Insurance for Women is Important?

In India, should NRIs purchase life insurance?

Do Life Insurance Premiums Increase Every Year?