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Difference between revisions of "Introduction to Insurance"
Cooleo (talk | contribs) (Created page with "{{Alphabets}} We often hear the term Insurance. But what exactly is Insurance? The definition says: a practice or arrangement by which a company or government agency provi...") |
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We often hear the term Insurance. | We often hear the term Insurance. | ||
| − | But | + | But '''What exactly is Insurance?''' |
The definition says: | The definition says: | ||
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There are two common insurance policies that every individual should have: [[Term Insurance]] and [[Health Insurance]] | There are two common insurance policies that every individual should have: [[Term Insurance]] and [[Health Insurance]] | ||
| + | ==Endowment Policy vs Term Policy + Mutual Fund== | ||
| + | Conceptually Endowment plans are not wealth builders. Do not mix insurance with wealth building. | ||
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| + | The best thing to do is a to take a good term policy and a good multicap mutual fund. | ||
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| + | This way, you get better returns from MF + best coverage from term policy for the same premium that we generally pay for the Endowment policy. | ||
==Related Topics== | ==Related Topics== | ||
*[[Insurance for the family]] | *[[Insurance for the family]] | ||
[[Category:Insurance]] | [[Category:Insurance]] | ||
Revision as of 19:29, 18 November 2017
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We often hear the term Insurance.
But What exactly is Insurance?
The definition says:
a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
So, from the definition, it is apparent:
1. Insurance is an arrangement (a contract actually)
2. Between you and the insurance company
3. That you pay premium amount at agreed terms
4. and in case of a specified loss, the insurance company pays you back.
There are two common insurance policies that every individual should have: Term Insurance and Health Insurance
Endowment Policy vs Term Policy + Mutual Fund
Conceptually Endowment plans are not wealth builders. Do not mix insurance with wealth building.
The best thing to do is a to take a good term policy and a good multicap mutual fund.
This way, you get better returns from MF + best coverage from term policy for the same premium that we generally pay for the Endowment policy.
Related Topics
- Insurance