A complete list of all the different types of insurances available in India

Types of Life Insurance policies

Insurance is a risk management tool that promises compensation for the economic loss suffered by an individual in case of specific events. Insurance policies cover different types of risks and if such risks occur and cause a financial loss, the policies pay for the loss suffered. Insurance plans, therefore, provide financial security and should be an important part of your financial portfolio.

Nowadays, individuals have become increasingly aware of the importance of having an insurance plan to cover their financial risks. As such, they are investing in different types of insurance policies for their needs. Whether it is mandatory motor insurance plans or the essential term insurance or health insurance plans, the penetration of insurance is increasing in India. Before you also invest in a suitable insurance plan, you should first understand the different types of policies available and which policy covers which risks.

So, here is a brief overview of different types of insurance plans available in India –

Classification of insurance plans in India

Broadly, the classification of insurance plans can be done under two divisions – life insurance and general insurance. Life insurance covers human lives while general insurance covers financial assets and risky events. Both life and general insurance categories have different types of plans under them. Let’s understand these variants of life and general insurance policies in brief –

Life insurance

Here is a table containing the brief details of different types of life insurance plans –

Name of the plan

Term Plan

Meaning

These plans cover the risk of premature death.

  • If the insured dies during the term of the plan, the sum assured is paid. Term plans, usually have no maturity benefit.
  • However, in return of premium plans, the premiums paid are refunded if the insured survives till maturity

Salient Features

  • Allows you to opt for a high sum assured for maximum financial security
  • The coverage can be enhanced by adding riders
  • Premiums are extremely low

Benefits Payable

The sum assured is paid on death of the insured.

Variants available

There are four types of term plans –

  1. Level term plans where the coverage remains the same forever,
  2. Increasing term plans where the sum assured increases every year,
  3. Decreasing term plans where the sum assured decreases every year,
  4. TROP or Term Plan with the return of premium option which returns the premiums on maturity

Name of the plan

Whole life plan

Meaning

The plan usually matures when the insured attains 100 years of age.

  • It, therefore, covers the individual for his whole life
  • If the insured dies during the plan tenure, the death benefit is paid.

Salient Features

  • The plan runs for the lifetime of the insured
  • Premiums, however, are paid up to a limited period

Benefits Payable

The sum assured is paid on the death of the insured any time before attaining 100 years of age.

Name of the plan

Endowment Plan

Meaning

This plan is a savings-oriented insurance plan which not only provides coverage against premature death, it also creates a corpus for the policyholder at the end of the plan term.

Salient Features

  • Guaranteed benefits are paid under the plan
  • These plans might or might not earn bonuses
  • Guaranteed additions, loyalty additions, etc. are added to the plan benefit to enhance it

Benefits Payable

  • The sum assured is paid on the death of the insured during the policy tenure
  • If the policy matures, a maturity benefit is paid.

Variants available

Pure Endowment, Money Back Plan, Child Plan, etc.

Name of the plan

Money-Back Plan

Meaning

This plan creates guaranteed returns over the policy tenure, provides insurance coverage and also allows liquidity. The sum assured is paid in parts over the term of the policy at regular intervals.

Salient Features

  • Money-back benefits, called survival benefits, are paid at regular intervals during the policy term
  • The plan earns a bonus which is paid on maturity or death
  • The sum assured is paid in full irrespective of the money-back benefits paid.

Benefits Payable

Survival benefits are paid over the policy tenure

  • If the insured dies, the sum assured and bonus are paid.
  • If the policy matures, the remaining sum assured and bonus are paid.

Name of the plan

Child Plan

Meaning

These plans are designed to secure the financial future of the child even if the parent dies during the term of the policy.
Either the parent’s or the child’s life is insured in this plan.

Salient Features

  • The plan usually has an inbuilt premium waiver rider. This rider waives the premiums if the parent dies during the policy tenure.
  • The premiums are then paid by the insurer on behalf of the parent.
  • The plan runs till maturity whereupon the promised maturity benefit is paid.
  • The plan can be a traditional plan or offered as a unit-linked plan.

Benefits Payable

  • If the parent dies during the policy term, a death benefit is paid but the plan continues as per schedule.
  • If the plan is a money-back plan, survival benefits would be paid as and when they are due.
  • When the plan matures, the maturity benefit is paid.

Name of the plan

Unit Linked Insurance Plan

Meaning

These are market-linked plans where the premium is invested in market-linked funds. The returns, therefore, depend on market performance.

Salient Features

  • ULIPs promise investment returns and insurance coverage
  • The returns are not guaranteed
  • Partial withdrawals allow liquidity from the 5th policy year
  • The plan is flexible as you can switch between funds, pay additional premiums through top-ups and also opt for riders.

Benefits Payable

In case of death, the higher of the sum assured or the fund value is paid.
If the plan matures, the fund value is paid.

Name of the plan

Pension Plan

Meaning

These are retirement-oriented plans which create a regular income in the form of annuities. Annuities are paid throughout the insured’s lifetime thereby providing funds even in the older years.

Salient Features

  • There are two types of pension plans – deferred pension plans and immediate annuity plans
  • The amount of annuity is chosen as per the annuity option available
  • Under deferred pension plans premiums can be paid over the policy tenure to accumulate a corpus

Benefits Payable

Under deferred annuity plans,

  • If the insured dies during the policy tenure, a death benefit is paid.
  • After the plan matures, 1/3rd of the accumulated corpus can be withdrawn tax-free.
  • The remaining corpus is used to avail annuity payments.

Under immediate annuity plans, an annuity is paid immediately after the plan is bought, depending on the annuity option available.

Variants available

Immediate Annuity and Deferred Annuity.

Annuity Options

There are 7 different possible annuity options and multiple variants of the same. Different annuity providers have different annuity options like:

  1. Life Annuity
  2. Joint Life Annuity
  3. Increasing Annuity
  4. Annuity Certain for 5, 10, 15, 20, 25 years
  5. Life Annuity with 50% or 100% annuity to the spouse after the annuitant’s death
  6. Life Annuity with Return of Purchase Price
  7. Joint Life Annuity with the Return of the Purchase Price

Name of the plan

Health Plans

Meaning

These plans cover specific illnesses and help the policyholder with financial assistance if the insured suffers from the covered medical illness.
The health plans offered by Life Insurance companies are usually fixed benefit health insurance plans which cover a specific illness.

Salient Features

  • Health plans can cover critical illnesses, heart-related illnesses or cancer.
  • The premiums are low and affordable.

Benefits Payable

The sum insured is paid in a lump sum if the illness covered under the plan occurs.

Coverage and exclusions in life insurance plans:

Here are the inclusions and exclusions of life insurance policies

Inclusions

Exclusions

Death during the policy tenure due to accidental or natural causes

Death due to suicide within one year of policy inception or revival

Health plans cover specific illnesses

Death due to criminal activities, adventure sports, etc.

Death after the policy has been terminated

Calculation of premium:

Premiums of life insurance plans are calculated based on the following factors –

  1. Age of the insured – the older the insured the higher would be the premium
  2. Sum assured chosen – higher the sum assured, higher would be the premium
  3. Term of the plan – higher the term, lower would be the premium
  4. Medical history – if the medical history is adverse, the premiums are loaded and are, therefore, higher. If there is no history of medical complications, the premiums would be charged at the standard rate
  5. Gender – premium rates for females are lower than males
  6. Occupation – if the insured is engaged in a dangerous occupation, the premium is loaded. The premiums charged are, therefore, higher.

General insurance:

There are multiple variants in the general insurance category. However, some of the most popular types of plans include the following –

Each of the above-mentioned types of general insurance plans is further sub-divided into different variants to suit the different coverage needs of individuals. So, let’s understand each type of general insurance plan in brief along with its sub-variants –

Health insurance

Health insurance plans are those which cover the medical costs if you face a medical contingency. Health insurance plans cover hospitalisation related expenses incurred when the insured is hospitalised.

The different types of health insurance plans include the following –

Name of the plan

Individual Health Insurance Plan

Meaning

Health insurance plans which cover a single individual

Coverage Details

Hospitalisation expenses like room rent, doctor’s fees, nurse’s fee, cost of surgery, blood, etc., daycare treatments, organ donor expenses, free health check-ups, ambulance costs, etc. on an indemnity basis

Name of the plan

Family floater health insurance plans

Meaning

  • Health insurance policy covers the entire family under a single umbrella plan.
  • Covers self, spouse, dependent children and dependent parents/in-laws can be covered under a single sum insured.

Coverage Details

Expenses incurred before and after hospitalisation, hospitalisation expenses like room rent, doctor’s fees, nurse’s fee, cost of surgery, blood, etc., daycare treatments, organ donor expenses, free health check-ups, ambulance costs, etc. on an indemnity basis.

Name of the plan

Senior citizen health insurance plans

Meaning

Health plans cover individuals aged 60 years and above. This could be on an individual basis or a family floater basis.

Coverage Details

Coverage for hospitalisation expenses, ambulance charges, daycare treatments, cataracts, joint replacement treatments, etc. on an indemnity basis

Name of the plan

Critical illness insurance plans

Meaning

Health plans which cover major illnesses and surgical procedures.

Coverage Details

The sum insured is paid in a lump sum if the insured suffers from any covered illness or undergoes a covered treatment. Illnesses like cancer, paralysis, open heart surgeries, organ transplants, etc. are covered.

Name of the plan

Hospital cash plans

Meaning

Health plans pay a fixed benefit if the insured is hospitalised for a period of 24 hours or more.

Coverage Details

A daily cash allowance is paid on hospitalisation. The amount of allowance would be fixed and independent of the actual medical costs incurred.

Name of the plan

Top-up health insurance plans.

Meaning

Health plans come with a deductible limit. Claims exceeding the deductible are paid under the plans.

Coverage Details

Hospitalisation expenses, pre and post hospitalisation expenses. ambulance costs, etc. are covered on an indemnity basis.

Name of the plan

Super top-up health insurance plans.

Meaning

Health plans with deductibles. If the aggregate claims exceed the deductible limit, the plan would cover the excess cost.

Coverage Details

Coverage is allowed for hospitalisation expenses, ambulance charges, daycare treatments, organ donor expenses, etc. on an indemnity basis.

Name of the plan

Disease-specific health insurance plans.

Meaning

Health plans cover specific illnesses like diabetes, cardiac ailments, dengue, etc.

Coverage Details

Hospitalisation expenses incurred due to the illnesses covered by the plan are paid on an indemnity basis.

Exclusions in health insurance plans

Here are some common instances of exclusion in almost all health insurance plans –

  • Pre-existing illnesses are covered after a waiting period of 2-4 years.
  • Specific illnesses and their treatments, like hernia, appendicitis, piles, joint replacement surgeries, etc. are covered after 1-2 policy years.
  • No claim is paid for illnesses within the first 60-90 days of buying the policy.
  • Illnesses due to nuclear or radioactive contamination, war, mutiny, participation in adventure sports, etc. are not paid.
  • Maternity expenses are not included in the coverage unless specifically stated otherwise.
  • HIV/AIDS
  • Alcohol or substance abuse
  • Cosmetic treatments
  • Psychiatric treatments, etc.

Calculation of health insurance premiums

Premiums of a health insurance policy is calculated taking into consideration the following factors –

  • Age of the insured – the higher the age the higher would be the premium
  • Existing medical conditions – if the insured suffers from any existing medical illnesses, the premiums would be increased
  • Gender – females are charged a lower premium than males
  • The term selected – if a longer-term is selected, premium discounts are allowed which reduce the premium
  • Premium discounts – if there are premium discounts offered by the company, the premium would reduce
  • Sum insured selected – higher the coverage amount, higher would be the premium
  • A number of members covered – if family members are also added to the coverage, the premium would increase.

Motor insurance

Motor insurance is taken on vehicles. A motor insurance policy that covers damages caused to third parties is mandatory as per law. Every vehicle on Indian roads is supposed to have a valid insurance cover to be able to run legally.

Motor insurance plans are separately designed for cars, bikes and commercial vehicles. Moreover, there are two types of policies which are as follows –

Third-party liability-only policy

Comprehensive policy

This policy covers the financial liability which incurs if the owner/driver of the vehicle causes bodily injury or death of any individual. Moreover, if any property belonging to a third party is damaged by the vehicle, the financial liability faced for such damage is also covered by the policy.

This policy combines coverage for third party liability and damages suffered by the vehicle itself. Third-party liability due to bodily injury or property damage is covered under the policy. Moreover, if the vehicle itself suffers any damage due to theft, natural causes or man-made causes, the loss suffered is also covered.

There is also a personal accident cover under both these plans. Under the personal accident cover, accidental death and disablement suffered by the owner/driver of the vehicle are covered for up to INR 15 lakhs. In case of accidental death or disablement, a lump sum benefit is paid.

Exclusions of Motor Insurance Policies:

Motor insurance policies do not cover damages incurred due to the following instances –

  • War or war-like perils
  • Nuclear contamination
  • Driving without a valid license
  • Driving under the influence of alcohol
  • Using the vehicle in violation of its limitations
  • Deliberate accidents
  • Driving outside India
  • Electrical or mechanical breakdown, etc.

A premium of motor insurance plans:

Premiums for a motor insurance policy depends on the following factors –

  1. Make, model and variant of the vehicle
  2. Insured Declared Value (which is like the sum insured of the policy and represents the value of the vehicle after depreciation )
  3. Fuel type
  4. Year of registration
  5. Age of the vehicle
  6. Third-party premium
  7. Modifications that were done to the vehicle if any
  8. Type of coverage required
  9. Add-ons selected if any
  10. Location of the vehicle
  11. No claim bonus discount if any
  12. Any other discount offered by the policy

Travel insurance

Travel insurance policies cover the financial losses suffered due to emergencies when you are travelling to another place. The trip might be for leisure, business or education and there is a travel insurance plan to cover the losses faced in any of these trips.

Travel insurance plans are further subdivided into the following categories –

Types of travel insurance plans

Meaning

International travel insurance

Covers losses suffered on international trips

Domestic travel insurance

Covers losses suffered on trips within India

Senior citizen travel insurance

Covers individuals aged 60 years and above going on a trip

Single trip travel insurance

Covers a single trip taken for a specified duration

Annual multi-trip travel insurance

Covers unlimited trips taken within a year

Student travel insurance

Covers students going abroad for education

Coverage and exclusions in travel insurance plans:

Inclusions

Exclusions

Medical treatments taken in an emergency when travelling

Pre-existing illnesses and their complications

Medical evacuation and repatriation

Travelling against the advice of a medical professional

Accidental death and disablement

Participation in hazardous activities

Personal liability

War and related perils

Emergency cash advance

Nuclear contamination

Loss of checked-in-baggage

Pregnancy and related complications

Delay of checked-in-baggage

Criminal acts, etc.

Loss of passport

Trip cancellation or curtailment, etc.

Calculation of travel insurance premiums

Premiums of travel insurance plans are calculated based on the following parameters –

  1. Number of members travelling together
  2. Age of the insured members
  3. Destination of travel
  4. Duration of the trip
  5. Additional covers, if opted
  6. Sum insured selected
  7. Coverage features

Home insurance

Home insurance policies are those which cover the financial loss suffered if the home and/or its contents are damaged. Home insurance policies prove to be beneficial in covering the losses suffered by your home due to natural or man-made calamities.

There are three types of home insurance policies which include the following –

Type of policy

Meaning

Structure insurance

This policy covers the structure of the home against damage or destruction

Contents insurance

This policy covers the contents of the home like electronic appliances, furniture and fittings, jewellery, work of art, personal belongings, etc. against theft or damage

Comprehensive insurance

This policy covers both the structure of the home as well as its contents

Coverage and exclusions in home insurance plans:

Home insurance policies have the following coverage and exclusions:

Inclusions

Exclusions

Damage to the structure due to natural or man-made causes

Loss due to war or war-like conditions

Theft of contents of the home

Wilful negligence

Third-party liability

Consequential loss

Cost of alternate accommodation when the house is being repaired or rebuilt

Nuclear contamination

Depreciation

A premium of home insurance policies:

The premium of a home insurance policy depends on the following factors –

  • The type of policy selected
  • The cost of the property
  • Cost of contents to be insured
  • Policy extensions, if selected
  • Location of the property
  • Basis of insurance – reinstatement or market value
  • Size of the property

Fire Insurance:

Fire insurance policies are those which cover the financial loss suffered if an asset is destroyed or damaged by fire and allied perils.

Fire insurance policies can be of the following types –

Type of policy

Meaning

Valued policy

The policy covers a specific value and pays the value in case of loss

Specific policy

The policy covers up to a specified sum insured limit. In case of a claim, lower of the sum insured or the loss suffered is paid

Floating policy

The policy covers assets at multiple locations under a single policy

Reinstatement value policy

Under this policy, the cost of reinstating the asset which is damaged in a fire or related perils is paid

Consequential loss policy

This policy pays for the loss of profit due to the interruption of activities after a fire

Comprehensive policy

This policy covers all types of loss suffered by the asset

Coverage and exclusions under fire insurance plans:

Fire insurance plans have the following coverage and exclusions –

Inclusions

Exclusions

Fire

War or nuclear contamination

Lightning

Underground fire

Riots, strikes or malicious damage

Theft after fire

Cyclone, tempest, hurricanes, etc.

Intentional damages

Flood

Pollution

Impact damage

Damage in cold storage due to power changes

Aircraft damage

Loss in earnings due to damage suffered

Rockslide or landslide

Removal of debris

Leakage from a sprinkler system

Implosion or explosion

Bush fire, etc.

A premium of fire insurance policies:

  • Nature of usage of the insured property
  • Location of the property
  • Value of the assets being insured
  • Add-on covers opted
  • Size of the property
  • Type of policy opted

Marine insurance

Marine insurance plans cover the damages incurred when goods are being transported from one place to another. These plans, therefore, are very beneficial for businesses as they allow them to avoid a financial loss in case of loss of goods in transit.

Marine insurance policies come in various types the popular of which are as follows –

Type of policy

Meaning

Cargo policy

This policy covers the goods being transported

Hull insurance

This policy covers the vessel which is transporting the goods

Freight insurance

If the vessel operator loses the freight payable on the goods which have been damaged in transit, the policy would cover such loss

Time policy

This policy provides covers a specific time period

Voyage policy

This policy covers a single voyage

Mixed policy

This policy combines time policy and voyage policy and covers trips taken between specific locations within a given period of time

Port risk policy

The policy covers any type of loss suffered by the vessel when it is anchored at a port

Block policy

This policy covers the land and sea voyages

Inclusions and exclusions of marine insurance:

The coverage benefits and exclusions in a marine insurance policy include the following –

Inclusions

Exclusions

Sinking or stranding of the ship

Deliberate loss or misconduct

Fire or explosion

Riots, war or strikes

Earthquake

Insufficient packaging of the goods

Jettison or washing overboard

Loss due to delays

Damage to the vessel due to the collision, piracy, etc.

Wear and tear of the cargo

Natural calamities

Leakage of packaged goods

Wreckage removal

Premiums of marine insurance policies:

The premiums of a marine insurance plan depend on the following factors –

  • Value and the nature of the goods that are being transported from one place to another
  • Amount of freight payable for the transportation
  • An inherent risk of the goods
  • The route of transportation
  • The type of vessel used for transportation and its value
  • A destination where the goods are being taken
  • Underlying risks of piracy, political instability, etc.
  • Possible natural calamities that would incur

Commercial insurance:

Commercial insurance plans are those which are bought by organisations to cover the different types of financial risks that they face. The most popular types of commercial insurance plans include the following –

Type of policy

Meaning

Group Mediclaim policy

A group health insurance policy taken by employers for covering their employees

Workmen’s Compensation policy

A policy designed as per the Workmen’s Compensation Act requires organisations to compensate their employees if the employees fall ill or are injured due to the nature of their employment

Commercial General Liability insurance

A policy that covers the multiple types of liabilities faced by businesses in their everyday operations

Directors and Officers insurance

A policy that covers the directors and officers of an organisation against the liability faced due to their mistakes and errors

Doctors Professional Indemnity policy

A policy that covers the liability faced by doctors due to negligence or error in their practice

Cyber insurance

A policy that covers the cyber risks faced by organisations and indemnifies them in case of cyberattacks.

How to buy insurance?

Here are the ways in which you should go about buying a suitable insurance policy for yourself from the different kinds of insurance plans–

  • Offline 

    You can buy insurance policies offline through any of the following modes –

    • By visiting the branch office of the insurance company and applying for the desired policy physically
    • By getting in touch with an insurance agent or a broker and buying the policy sold by him/her
    • By contacting an executive of the insurance company to visit you and help you buy the insurance policy 
  • Online

    The online mode is easier as it allows you to buy a suitable insurance policy conveniently, from your own home or office. Moreover, many insurance plans are issued instantly when you buy them online which helps in saving time and effort. 

    Many insurance companies, online aggregator websites and online brokers sell insurance plans online. You can choose any online marketplace and find the best policy that you want.
    You can also choose Turtlemint which offers you some of the best benefits. Turtlemint is tied up with leading insurance companies, both life and general insurers, allowing you to select the best plans available in the market. You can compare the main types of insurance plans on Turtlemint’s website and then buy the best. You can also get personalised assistance for any queries that you have during the purchase process. Turtlemint’s personalised service helps you find the best insurance plan. Just visit Turtlemint’s website at www.turtlemint.com, compare and buy the plan that you need.

Things to keep in mind when buying insurance:

Now you know how many types of insurance plans are available in the insurance segment. However, when you are choosing an insurance policy, the following things should be kept in mind –
The different forms of insurance are relevant given the different types of financial risks faced by individuals as well as businesses. So, choose suitable insurance plans based on your risks and enjoy financial security. Also, compare the available insurance policies online to find a policy that offers the best coverage benefits at the most affordable premium rates.

FAQs

  1. What are the tax benefits of insurance?

    Life insurance and health insurance plans allow tax benefits. The premium paid for life insurance policies qualifies as a deduction up to INR 1.5 lakhs under Section 80C. Premiums paid for health insurance policies or riders offered by life insurance companies qualify for deduction under Section 80D. The limit of deduction is INR 25,000 which increases to INR 50,000 for senior citizens. Buying a separate health plan for senior citizen parents and paying premiums for them would also allow an additional deduction of up to INR 50,000. Besides tax benefits on premiums, the benefits received from a life insurance policy are also completely tax-free under Section 10 (10D).

  2. What is the duration of health insurance plans?

    Health insurance plans are offered for one year. However, you can buy coverage for two or three continuous years too by paying the aggregate premium at once.

  3. What is group insurance?

    Group insurance plans are those which offer coverage to a group of individuals under a single plan. For instance, group insurance plans can be bought by the employer for their employees, banks for their account holder, etc.

  4. Can I buy a life insurance policy for my child?

    Yes, you can buy a life insurance policy for your child. In that case, the child would be the life insured and you would be the policyholder.

  5. What is the meaning of the nominee?

    A nominee is an individual who is authorised to collect the death benefit if the insured dies.

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