intermediate

Recap of the Intermediate Course on Insurance

Before diving into the advanced Insurance module, here’s a quick review of essential concepts covered in the intermediate course. Understanding these ideas will help you grasp more complex insurance topics ahead:

Important Insurance Terms

Insurance acts as a financial safety net for unexpected events, like accidents or health issues. Key terms like premium, deductible, policy limit, and co-pay define the costs and coverage specifics of insurance policies.


For example, the premium is the amount you regularly pay to keep your coverage active, while the deductible is what you pay out-of-pocket before insurance kicks in. Co-pay denotes the shared cost of medical services, requiring policyholders to pay a percentage of their expenses.

Types of Life Insurance Policies

Life insurance provides financial security for your loved ones in case something happens to you. Different policies cater to various needs:

Term Insurance

Offers high coverage at low premiums but provides no payout if you outlive the policy term.

Endowment Plans

Combine insurance with savings, paying back your investment with a bonus if you complete the term.

ULIP (Unit Linked Insurance Plans)

Blend life coverage with investment, allocating part of your premium to equity or debt funds.

Money-Back Policies

Return portions of the insured sum periodically during the policy term.

Understanding General Insurance

General insurance covers non-life aspects, like health, vehicle, property, and travel.

health insurance

Health Insurance

Health policies cover medical expenses, from hospital bills to certain procedures. You can get individual coverage or a family plan, which includes immediate family members.

Critical Ill

Critical Illness Insurance

Designed for serious conditions like cancer or heart disease, this type pays a lump sum upon diagnosis, easing the cost of care.

home insurance

Home Insurance

Home policies protect your home and belongings from risks like fires, floods, or theft.

vehicle insurance

Vehicle Insurance

Covers costs from accidents, theft, or damage. Comprehensive policies cover your vehicle, while third-party insurance (required by law) covers damages to others.

Travel Insurance

Covers financial protection during trips, covering trip cancellations, medical emergencies, and lost luggage. Different policies cater to specific needs, such as trip cancellation and medical coverage, with costs influenced by trip expenses, destination, and the traveler's age.

How to Determine the Right Insurance Coverage

Multiple factors influence life and health insurance coverage. For life insurance, the required amount varies based on family size, debts, future expenses, and lifestyle. For families with multiple dependents, coverage should typically be between 10 to 25 times your annual salary. Those with significant obligations, like a large mortgage, may opt for higher coverage.


For health insurance, the coverage requirements hinge on age, health condition, and family medical history. Younger, healthier individuals might only need basic plans, while older adults or those with pre-existing conditions require more comprehensive coverage. Lifestyle choices, such as maintaining good health, can also affect premiums.

1

Pradhan Mantri Jeevan Jyoti Bima Yojana

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is an affordable life insurance scheme that addresses the accessibility challenges posed by many life insurance policies, which often come with high premiums that many cannot afford. Under PMJJBY, individuals aged 18 to 50 can secure a life insurance coverage of ₹2 lakhs for an annual premium of approximately ₹436, making it accessible across various income levels.

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Pradhan Mantri Suraksha Bima Yojana

The Pradhan Mantri Suraksha Bima Yojana (PMSBY) is an insurance initiative aimed at providing financial security against accidental risks for individuals aged 18 to 70. This scheme addresses the need for affordable insurance, ensuring that even those from lower-income backgrounds can access coverage.

For a nominal annual premium of just ₹20, PMSBY offers significant benefits, including financial compensation of ₹2 lakhs for accidental death and ₹2 lakhs for permanent disability resulting from an accident. Additionally, it provides ₹1 lakh for partial disabilities that hinder one’s ability to work. This financial support can cover medical expenses and assist families in maintaining stability during challenging times.

revisit

Interested in learning more about the topics we just discussed? We suggest revisiting the Intermediate module to strengthen your understanding of the core concepts.

This review will equip you for the Advanced module, where we will learn about financial risk management, risk pooling, underwriting, the role of IRDAI, and the latest changes in the Insurance sector. You will also gain a comprehensive understanding of life insurance, ULIPs, general insurance, vehicle insurance, health insurance, and the claim process for each.