Gamblers make bets they hope to win. Prudent people on the other hand, make bets that they hope to lose. Stripped of jargon it means a life insurance policy is a bet—one that the policy-holder only wins by dying early!

In fact, every insurance policy is a bet that you would like to lose. It could be a health problem, accident or theft. It could even be the destruction of your mortgaged home.You pay a small sum and the insurer assures you of compensation if disaster does strike.

Insurance covers a wide range and mixture of risks. So policies can get complex— there are always pages of fine print. Individuals need to know about the health, asset and auto insurance options. If they run home office establishments, they must extend their knowledge a little further.

Recent detariffication has led to more flexibility in policy structure and pricing. Unfortunately, while pricing and legal structures are in place, public awareness is low. Indians are frighteningly under-insured, especially when it comes to the non-life segments.

In 2005, just 6.7 lakh health policies were sold. Only 33.5 lakh motor policies were sold in 2005, which means that vehicle owners routinely flout the law given that 77 lakh vehicles (according to Society of Indian Automobile Manufacturers) were sold that year. It’s likely that lots of people without medical insurance end up in hospital following an accident while on the road in their uninsured vehicles.

So it shouldn’t take too long to get the concept of insurance across. But people need details. What can they insure? What should they insure? How much will it cost? And what new can we expect in terms of policies and pricing? We offer some answers on the following pages.