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Which insurance suits you? Insurance recommended for different age groups

Which insurance suits you? Insurance recommended for different age groupsIn the modern world, we like to ensure and insure everything to avoid unexpected loss. In one way, insurance is necessary for people listed in monthly payroll. But still many are not preferred to go for it and there is a thinking of mass that insurance are kind of financial instruments selling by agents for their own benefits.

We have to be aware on the types, coverage details, monetary benefits etc, of insurances so that we won’t fall into any trap. Here’s the types of insurances with a description and an additional information ‘Which insurance suits you according to your age?’

What are the common insurances utilized by common public?

  • Life Insurance
  • Health Insurance
  • Motor insurance
  • Travel Insurance

Life Insurance

There are varieties of life insurance policies and the most common are,

Term Life Insurance

As the name implies, term life insurance makes the beneficiary eligible to receive the death benefit during the term agreed. Premium for this insurance is comparatively low and once the agreed term expires, either insured or beneficiary is not entitled to receive anything from the insurance company.

Endowment Life Insurance

In endowment life insurance, the assured sum will be paid to the beneficiary upon death of the insured or the maturity of the policy contract whichever is earlier. So unlike term insurance, endowment policies not only covers death benefits but also yields an assured sum in case the policy is not utilized till the maturity. Premiums for the endowment plans will be slightly higher than term insurance plans. There are two sub categories in the endowment plans. With profit and without profit. Endowment plans with profit yields some returns on the premiums paid and obviously without profit plans pays only coverage and maturity amount.

ULIPs

Unit Linked Insurance Plans (ULIPs) is a hybrid instrument which satisfies both insurance and investment needs of the policy holder. In ULIPs, the paid premium is split into two. One part goes for life insurance cover and the other goes for stock or debt market investments. Part of the premium collected from each policy holder is pooled into a single fund similar to mutual funds and the amount will be invested in equities, bonds or in mixed proportion in equities/bonds depends on the scheme.

Like mutual funds, the fund has NAV and the invested amount yields return to the policy holders.

Money Back Life Insurance

Money back insurance policies provides death cover and unlike pure endowment policies, it split the assured sum and pays beneficiary in various intervals during the insurance term. This is preferred by people who have periodical monetary needs and can’t afford to wait up to maturity. For eg: If the policy term is 20 years, 20% of the assured sum will be paid back by end of 5 years, another 20% will be paid by end of 10 years, one more 20% will be paid by end of 15 years, remaining 40% will be paid on maturity (end of 20 years) along with applicable bonus amount.

Health Insurance

This is most popular insurance. In health insurance, the insurer collects periodical premiums and provide insurance coverage for medical expenses in case of sickness, injury or death of the insured. Not only English medicine, few insurance companies cover holistic medicines too in order to ensure wide coverage for the policy holder. A less known fact many health policies don’t cover dental treatment.

Motor Insurance

In country like India, this is a compulsory insurance as per the regulations. Motor or Vehicle insurance covers any damage to the insured vehicle and the liability arises over any accidents/damage to the insured vehicle. Insurance companies also covers whatever the liability arises out of such accidents to the vehicle. It can also have cover for the case of vehicle thefts.

Travel Insurance

Travel insurances are usually accompanied in your air and train journeys, thus a short term insurance. It covers any trip cancellation, loss, damage or theft of baggage etc. It is highly recommended to have travel insurance particularly in international air travels by which you can relieve from burdens and loss in case of unexpected instances.

Generally, each age group prefers to have a different kinds of insurances, which we classified below.

Age group Life Insurance Health Insurance Travel Insurance
Under 18 Not preferred Not preferred Preferred
18 to 45 years Preferred Preferred Preferred
Above 45 years Preferred Preferred Preferred

Mostly, people are looking for insurance during the age when the family have more dependency on them. There are few more insurance policies which are crucial but not given due importance such as property insurance, credit insurance, job loss insurance, crop insurance, phone/gadgets insurance etc. To know about other useful insurances, click here.

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