What is General Insurance? Definition, Features, Types & Benefits

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.

Table of Content

What is General Insurance
Types of General Insurance Plans
Health Insurance
Motor Insurance
Travel Insurance
Home Insurance
Fire Insurance
Other Types of General Insurance
How to buy General Insurance Plans?
Top #4 points to consider when buying general insurance
Documents needed to buy general insurance plans

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 financial 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
Covid-19 specific health insurance plans
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 hospitalization

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 chosen	Third-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.

How to buy general insurance plans?

General insurance policies can be bought offline or online. Buying offline means buying through general insurance agents or by visiting the branches of the company. This might prove to be difficult and inconvenient. Buying online, on the other hand, is quicker and more convenient as you can buy the policy easily from your home or office.

Turtlemint is an online platform which allows you to buy general insurance policies online. All the popular types of general insurance policies are available on Turtlemint’s platform and you can buy the policy easily. Just visit www.turtlemint.com, choose the general insurance plan that you want to buy, enter your details and you would be able to check the available plans. Turtlemint is tied up with leading general insurance providers which offer multiple types of general insurance plans. Thus, on a single platform, you can see, compare and buy any type of general insurance policy that you need. The premiums can be paid online and you can even get the policy issued within minutes.

Top #4 points to consider when buying general insurance

When you want to buy general insurance plans, here are some points which you should always keep in mind:

Choose a plan which you require. Health insurance plans are a must and if you have a vehicle you also need motor insurance. Travel insurance plans are relevant when you are going on a trip. So, understand your coverage requirements and then buy a plan
Ensure that the coverage level is optimal to cover your financial losses
The premiums of the plan should be affordable so that you don’t face a financial strain in paying for the policy
Always compare before buying. There are different policies available in the market and each policy offers something better than the other. When you compare you would be able to find the best general insurance policy which not only provides extensive coverage but also comes at a lower premium. So, don’t forget to compare. Turtlemint allows you a platform to compare the different types of general insurance policies available. You can check the plans for their coverage benefits and premiums and then buy.

Documents needed to buy general insurance plans

You would need the following documents to buy a general insurance policy –

Proposal form for the policy
Identity proof
Age proof
Address proof
Details of the asset which is being covered
Photographs
Other documents depending on the type of policy that you buy

General insurance plans are the ideal solution for covering your financial risks. The different types of general insurance policies provide coverage for all possible types of financial risks that you might face. So, choose the policies that you require and invest in general insurance for financial security.