Aligarh Muslim University Malappuram Centre, Kerala: Topic

ALIGARH MUSLIM UNIVERSITY
MALAPPURAM CENTRE, KERALA
Insurance law
End term Assignment
TOPIC- GENERAL INSURANCE IN INDIA
Submitted to Submitted by
Dr.shaisha nasreen Sadhvi Singh
Assistant Professor GK7930
Department of law 18BALLB33
Introduction 3
What is general insurance 4
Types of general insurance 5
Health insurance 6
Travel insurance 6
Fire insurance a 6
Other type of insurance 7
Conclusions 7
Bibliography 8 to 13
INTRODUCTION
The insurance segment in India is divided into two categories – life insurance and general
insurance. While life insurance policies cover the financial loss suffered due to loss of life,
general insurance policies cover the financial loss suffered due to the loss of an asset. General
insurance, therefore, covers the loss of economic value of assets or the financial loss suffered
due to specific contingencies. General insurance has different types of plans, each of which is
designed to cover specific risks. So, let’s understand the concept and the types of general
insurance plans in India.
What is general insurance?
General insurance is the insurance of assets, financial assets included. If, due to a contingency
which is covered under the plan, there is an economic loss, the loss is compensated by general
insurance policies.
Top advantages of general insurance plans
 General insurance plans are beneficial because of the following reasons –
The plans cover financial losses and compensate you for the losses that you suffer. As such,
general insurance plans provide you financial security even in the case of contingencies
In some cases, general insurance plans are mandatory by law. For instance, motor insurance
plans are mandatory as per the Motor Vehicles Act, 1988. Similarly, if you are travelling to
Schengen countries, you mandatorily need a valid overseas health insurance plan. When you buy
such mandated plans, you fulfil the legal obligation and save yourself from violation offence
General insurance plans help in protecting your savings in emergency situations. You can,
therefore, use your savings to fulfil your financi inal goals
Health insurance plans, which are a type of general insurance plan, allow you tax benefits. The
premiums paid for such plans are allowed as a deduction under Section 80D. This deduction
helps in lowering your taxable income which, in turn, lowers your tax liability and helps you
save tax.
Types of general insurance plans
There are a lot of general insurance plans available in the market. However, the popular and the
most important ones are as follows –
Health insurance
Health insurance plans cover the medical expenses which you incur if you fall ill or are injured
and need medical assistance. Since the cost of medicine is very high, health insurance plans
prove very beneficial. They pay for the medical expenses thereby saving your finances from the
strain of the costs incurred on your treatments.
Features of health insurance plans
Here are some of the common features of health insurance plans –
Health plans can be taken to cover yourself as well as your family members
Expenses incurred on room rent, surgery, nurse’s fees, doctor’s fees, ambulance, day care
treatments, etc. are all covered under health insurance plans
The premiums paid are allowed as a deduction. You can claim a deduction of up to INR 1 lakh
by paying health insurance premiums for yourself, your family and dependent parents.
There are different types of health insurance plans available in the market. These include
the following –
 Individual health plans which cover a single individual
 Family floater plans which cover the whole family
 Senior citizen plans which cover senior citizens
 Critical illness plans which cover specified critical illnesses
 Disease specific plans for specific diseases
 Top-up and super top-up plans for supplementing an existing coverage
 Hospital cash plans which pay a daily benefit in case of hospitalisation
How much does health insurance cost?

The premiums of a health insurance policy are calculated based on the following factors –
Factors affecting premiums How premiums are affected
Age of the insured Higher the age, higher would be the premiums and vice-versa
Sum insured selected Higher the sum insured, higher would be the premium and vice-versa
Coverage benefits More the coverage features, higher would be the premium and vice-versa
Number of members covered More the members covered, higher would be the premium and
vice-versa
Medical history If you or any covered member has an adverse medical history, the premium
would be higher
Discounts available Higher the discounts offered by the plan, lower would be the premium and
vice-versa
Type of policy There are different types of health insurance plans and the premiums are different
for different plans
Motor insurance
Motor insurance plans are general insurance plans for vehicles. These plans are mandatory as per
law and have to be bought for every vehicle so that the vehicle is allowed to run on Indian roads.
Features of motor insurance plans

There are two types of policies available in the market – third party liability and comprehensive
Third-party plans are legally mandatory while comprehensive plans are voluntary
Third-party plans cover only the financial liability suffered if you harm any individual or third
party property
Comprehensive plans also cover the damages suffered by your vehicle itself
There are different motor insurance policies covering cars, two-wheelers and commercial
vehicles
How much does motor insurance cost?

Motor insurance premiums are determined based on the following factors –
Factors affecting premiums How premiums are affected
Type of policy chosenThird-party plans have lower premiums compared to comprehensive ones
Make, model and variant of the vehicle The make, model and variant determine the value of
the vehicle. Higher the value, higher would be the premium and vice-versa
Age of the car Older the vehicle, lower would be the premium and vice-versa
Add-ons selected Comprehensive plans offer optional additional coverage benefits. If the
benefits are selected, the premiums would increase because each add-on has an additional
premium
Discounts available Higher the discounts offered, lower would be the premium and vice-versa
Registration location Vehicles registered in metro cities have higher premiums than those
registered in non-metro cities
Travel insurance
Travel insurance plans are those which cover financial emergencies that you face when you are
travelling to another place. These plans, therefore, cover your trips against unforeseen
emergencies.
Features of travel insurance plans
Travel insurance plans can be of the following types –
 International travel insurance plans
 Domestic travel insurance plans
 Student travel insurance plans
 Senior citizen travel insurance plans
 Single trip policies
 Annual multi-trip policies
 Coverage under travel insurance plans include the following common benefits –
 Medical emergencies
 Medical evacuation and repatriation
 Loss of checked-in-baggage
 Delay of checked-in baggage
 Loss of passport
 Personal accident
 Third-party liability
 Trip cancellation or curtailment
 The policy covers you for the duration of your trip
 You can also cover family members going on a trip with you under the same plan
How much does travel insurance cost?
Premiums of a travel insurance policy depend on the following factors –
Factors affecting premiums
How premiums are affected
Destination Premiums depend on the destination of your trip. Developed countries like UK,
USA, Australia have higher premiums
Number of members travelling Higher the number of family members being covered under
the plan, higher would be the premium and vice-versa
Age of the members Higher the age of the members covered, higher would be the premium and
vice-versa
Trip duration Longer the duration of the trip, higher would be the premium and vice-versa
Sum insured Higher the coverage amount, higher would be the premium and vice-versa
Coverage features Higher the number of coverage benefits under the plan, higher would be
the premium and vice-versa
Type of policy Different travel insurance plans have different premium rates
Medical history If you or any family member suffers from any medical condition,
premiums would be increased
Home insurance
Home insurance plans cover the financial losses that you suffer in case of your home and/or its
contents are damaged. Home insurance policies, therefore, provide financial coverage against
natural and man-made disasters which cause a loss to your house property.
Features of home insurance

There are three types of home insurance policies. They are as follows –
Structure insurance which covers the structure of your home
Contents insurance which covers the contents of your home
A comprehensive policy which covers both structure as well as the contents of your home
The policy covers natural calamities like earthquakes, floods, storms, cyclones, etc.
Man-made calamities are also covered like fire, theft, riots, etc.
The policy can be taken on a replacement value clause or market value clause
How much does home insurance cost?

Premiums for home insurance policies depend on the following factors –
 Factors affecting premiums
 How premiums are affected
Type of policy selected
The type of policy that you select would determine the premium payable
Age of the house
Older houses have lower premiums and vice-versa
Location - Location of the house determines its construction cost. If the property is located in a
prime location the premiums would be higher
The expected cost of construction
The expected cost of construction determines the premium rate. The higher the cost the higher
would be the premium
Coverage amount
Higher the coverage amount is chosen, higher would be the premium
Fire insurance
Fire insurance policies cover the damages caused by fire and other related perils. The policy
covers damages suffered by property or specified assets.
Features of fire insurance plans
The policy covers the cost of repairs or replacement of the insured asset when it is damaged by
fire or related perils
There are different types of fire insurance policies which include the following
–
 Valued policy
 Floating policy
 Specific policy
 Comprehensive policy, etc.
A fire insurance plan also covers damages suffered due to lightning, floods, storms, cyclones,
inundation, impact damage, missile testing operations, etc.
If any third party property is damaged due to fire or other covered perils, the policy would cover
such losses too
There are various extensions which are available under fire insurance plans. These extensions
come at an additional premium. You can add as many extensions that you like to enhance the
coverage.
How much does fire insurance cost?

The premiums of fire insurance policies depend on the following factors –
Factors affecting premiums
How premiums are affected
Location risk
If the property is exposed to the risk of fire due to its location, the premium would be high
Value of the insured asset
The premium depends on the value of the asset being insured under the plan. Higher the value,
higher would be the premium
Extensions selected If extensions are added to the policy, the premium would increase
Type of asset
The type of asset being insured also affects the premium rate
Other types of general insurance policies
Besides the above-mentioned plans, there are commercial general insurance policies too. These
policies include the following –
 Marine insurance
 Commercial General Liability Insurance
 Directors and Officers Insurance
 Cyber risk insurance
 Professional Indemnity Insurance
 Group insurance plans, etc.
Conclusion
Insurance is a concept that applies to a large group of people which may suffer the same risk in
the same conditions or region. The money collected as the premium can be called as a pool and
when anyone faces a loss, the person is paid from that pool.
Still perplexed at how does a general insurance policy come into play? Consider that your
mother suffered a heart attack suddenly and she needs a transplant.
At the same time, your daughter’s college fee was due. It definitely is a huge expense to be made
at the same time and none can be preferred over the other.
In this time of stress, the family’s health insurance policy can save your burden and the fees can
be paid from the savings. A General Insurance Policy here works to save your burden for money.
Bibliography
 www.scribd .com
 Live law .com
 Articles on Insurance law by am project.com

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ALIGARH MUSLIM UNIVERSITY

MALAPPURAM CENTRE, KERALA

End term Assignment

TOPIC- GENERAL INSURANCE IN INDIA

What is general insurance 4

Types of general insurance 5

Other type of insurance 7

How much does health insurance cost?

Features of motor insurance plans

How much does motor insurance cost?

Features of home insurance

How much does home insurance cost?

How much does fire insurance cost?

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