Insurance Fund
With the increase in nuclear families and growing inflation, insurance has become a necessity for all of us. There are broadly two types of insurance : Life Insurance and General Insurance. While general insurance reimburses the loss caused due to various events, life insurance it about compensating the economic value of your life, in case of loss of life.
How does insurance work?
Insurance is about transferring the risk to the insurer in lieu of a premium. The premium of similar nature of risks are pooled together to create the insurance fund. The fund is managed by professionals within the framework of IRDA (Insurance Regulatory and Development Authority) and they see to it that the investors fund is safe.
The insurance fund is invested as per terms agreed between the insurer and insured, The policies differ from each other primarily in their investment patterns. The insured must opt for products taking his age, risk appetite and his financial goals in mind.
Returns
The returns may be fixed or variable (subject to market conditions), as opted by the insured. One may also choose between getting periodical payouts or a lump sum amount based on his requirements. Taxation is also a beneficial consideration for one to go for insurance products.
