Understanding Insurance

Insurance is an important instrument to consider while planning finances. However, several people in India still do not have even a single insurance policy. The reason for this is lack of knowledge and understanding about the importance of insurance.

Here are some must-knows about insurance that will help you understand why an insurance policy, such as health, life or even motor insurance is important.

What is insurance?

Insurance is a contract that is made between an insurer, which is the insurance company and the insured, who is the individual availing of insurance, where the insured pays the insurer a certain premium. In return of these premiums, the insurer provides protection to the insured in case the latter suffers unexpected financial losses. This loss could be in the form of life, home, medical emergency, a vehicle or anything else that is insured for. Life insurance, health insurance, and motor insurance are the most common types of insurance. Here is an insight into each of these insurance policies so that you have a better understanding of the same.

Life insurance

A life insurance policy is one that provides financial protection in the form of death benefit in case you pass away. Life insurance policies are broadly divided into two categories, namely whole life insurance and term insurance. While whole life insurance provides you coverage for a life time and also has a savings component to it, a term life insurance as its name suggests comes with a stipulated period, without a savings component.

Health insurance


A health insurance policy is one that covers hospitalization and other medical expenses of an individual. However, it is important to note that not all medical and costs are covered by a health insurance policy. Also, coverage under this kind of policy is only received if the patient has been admitted. Below is a detailed list of the requirements you need to know with regards to your health insurance policy.

  • • You may make a claim for hospitalization only when the policy is in force.
  • • Coverage cannot be opted for if you are an out-patient, and you need to serve a minimum of 24 hours as an in-patient in order to avail of insurance coverage. However, depending from insurer to insurer, this clause may be relaxed for cases like dialysis, cataract, chemotherapy, besides others.
  • • Coverage is applicable only if the patient is admitted for active treatment and not merely for observation or diagnostic purposes.
  • • The hospital needs to be a registered one and come under the network of hospitals of your insurance provider.
  • Health insurance policies have certain exclusions like maternity, alternate treatments, self-afflicted injury, injury due to intoxication, dental surgeries, and cosmetic surgeries. These exclusions differ from insurer to insurer.
  • • You may avail of pre-hospitalization for up to 30 days and post-hospitalization charges for up to 30 or 60 days, depending on your insurance company’s policy.


Motor insurance

Motor insurance is a kind of insurance that protects you from any financial losses you incur due to damage to your vehicle. There are mainly two types of motor insurance namely:

  • • Third party liability, which is a mandatory insurance for all vehicle owners. This kind of insurance protects your finances by covering any damage caused to a third party by your vehicle
  • • Comprehensive motor insurance, on the other hand, covers any damage caused to your vehicle as well as to a third party’s vehicle.

Now that you have an understanding of various types of insurance and know the benefits of the same, it is important to avail of insurance and protect yourself against untoward situations.

*premium Amount for Male, 35 yrs, 10 year term, Silver option, including tax.
HDFC Standard Life Insurance Company Limited.

Insurance is the subject matter of the solicitation. For more details on risk factors, associated terms and conditions and exclusions please read the product brochure before concluding a sale. HDFC Life Health Assure Plan (Form No. P501-105, UIN: 101N087V01) is the name of traditional health plan offered by HDFC Life. HDFC Standard Life Insurance Company Limited is only the name of the Insurance Company, HDFC Life is only the name of the brand and HDFC Life Health Assure Plan is only the name of the product. The name of the company, name of the brand and the name of the product does not in any way indicate the quality of the contract, its future prospects or returns. HDFC Standard Life Insurance Company Ltd. IRDAI Reg No. : 101. ARN: MC/03/2015/6186.
CIN : L65110MH2000PLC128245. Tax benefits are subject to change in tax laws.

Corporate Office & Registered Address

HDFC Standard Life Insurance Company Ltd.
Lodha Excelus, 13th Floor Apollo Mills Compound,
N.M. Joshi Marg, Mahalaxmi
Mumbai, Maharashtra 400011
Telephone: (022) 67516666

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