Mohan Thulasingam

Many of us think that taking insurance is a cost and utter waste. But, remember, this cost is very least when you compare the benefits that accrue to you in the event of an unfortunate event.

Moreover, the money spent in insurance contracts  can be a good savings -cum- investment for your life and the family.This arrangement takes care of the welfare of your family. You can make a choice of good plans to cover the basic risks of your living like Life, Health, Home, Vehicles, etc.

For your business or profession, go for the policies that will insure the risks associated with your products, fixtures and fittings like plant and machinery,etc..

What is Insurance?

Risks involved in our life are many. Death is the unbearable and irreparable of all risk.That too  untimely death leaves shock and vacuum in a family. To take care of such unfortunate death or any sort of risk ,   a mechanism is in place to transfer the risk from one place or person to another.

When risks  are managed by self  without transfer to another, they are ” Retained Risks”  and they are called as ” Transferred Risks ” when passed on to another for a consideration or price which is popularly known as “Premium”.

As the cost is heavy, an individual cannot bear the risk of others. However, an institution like Cooperative or Firm or Corporate concern can manage them . Cooperative Society for Death relief is an example for managing the expenses arising from death of a member. This is very popular among fishermen folks whose life is at risk when venturing out into the sea.

Types of Insurance

There are basically two types of insurance: life and non-life insurance.

Life type is for compensating the dependants in the event of death of the policy holder. This has two sub categories as 1) pure insurance or term insurance where premium rate will be lower but no returns or refunds made if the person survives after the policy period 2) endowment type ,where death and maturity benefits are combined ,which naturally comes at a higher premium.

Non life products cover the risks like Accident, Marine, Health, Goods, Agricultural crops,Cash-in-transit, etc. The popular Mediclaim policy belongs to Health insurance category.

Apart from these, third type exists as Reinsurance which insures risks like Satellite, Spacecraft, etc…involving huge amounts and also when the sum insured exceeds ₹100 crores for each case.

The benefits of insurance will be made fully under all policies  for Life insurance whereas only one insurance amount will be settled in the case of Non-life insurance type. Another difference is the period of cover : one year for non-life  policy renewable every year and longer period for life insurance.

Do’s & Don’t s for Insurance

1) Always read the contract notes when received after committing to an insurance cover.Possibilities are there, that even after taking all precautions prior to buying the insurance    product, some exclusions to the risks coverage .

2) Always keep the policy in force by paying the premium regularly.Your claim will be rejected if you have not paid the premium.

3) Always Keep the insurance company informed if you make any changes in the Address, change in the nature and composition of assets covered,etc..This issue crops up in the case of business assets and movable assets like vehicles . When you buy a second hand asset, the risk is more: you have to ensure the title is transferred in your name before taking the insurance.

4) Always buy Life insurance covers from the reputed companies which have a good name in the market .New insurers tend to be inclined towards more business and profit , rather than  the payment of the claims under their policies.

So, Insurance cost  is a Not a Liability but an Investment for Future asset .


(Author is a Ex-Banker and can be contacted on

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  1. vswami says:

    Sorry for being late to catch up; but better than never; is it not !
    Hints, at least some, not all though, may be found to be of useful guidance, for those interested and toying with the idea but still not yet decided about a life cover. Apart from lic, also health cover, another area which must be of no less concern but the need to have an insurance cover is for goods and property of varying types. For instance, insurance against risks is inevitable in respect of house property; as otherwise, its owner will, for obvious reasons, be jeopardising not only his own interests but in turn, also of any other having a vested interest in the property e.g. lender of monies on the security of the property . Lately, there has been some publicity given in the media with the aim of creating n awareness, but there have been no marked signs of any change in the mindset of one and all expected to be really concerned.
    In the context, a mention cannot rightly be avoided, of the most disturbing development prima facie deserving to be ridiculed as obnoxious. That is, in relation to and arising out of some radical changes sought to be made , violently impairing the very concept of ‘insurance’ , through amendments in 2015, of the extant law on insurance.
    Again, it is a tragedy that public opinion has thus far remained to be forcefully motivated.
    Over to the author of the write-up and like-minded others for taking on, appropriately and on a timely basis, for the common good !
    KEY NOTE: Viewpoints founded on own conviction are to be found to have been shared and placed in public domain, in the fond hope of eventually bringing about an alteration / correctives in the wrongly chosen direction. .

  2. Natabar Panda, Advocate, High Court of Orissa says:

    All must have heard the slogan of LIC -“jindegi ke sath bhi, jindegi ke bad bhi”. It is true that every one should buy Life Insurance Policy for the safety of self and his family as well.

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