What is Insurance?
Insurance is a legal agreement that involves financial compensation for damage or loss. This agreement is between two parties, the insurance company(insurer) and the individual (insured). Usually, the insurance company promises to make good returns for the losses of the individual from a contingency event (uncontrollable or uncertain event) like the death of the insured or damage of property etc. Insurance is a good way to protect yourself and your family from a financial loss.
How insurance works
Choose an insurance policy. An insurance policy is a legal document that contains details about the circumstances and conditions under which the insurance company will give out the insurance amount to the insured person. This document lists exactly what the insured is or not protected against.
Pay the premium. The premium is the amount paid by the insured every month, a year or just once to have the insurance. The amount paid depends on the risk and on the value of the events you’re ensuring. The insured pays a little charge(premium) in return for the promise made by the insurer. Generally, the charge for a big insurance cover is much lesser. The insurance company takes the risk of providing a high cover for a small charge because most insured people may end up not claiming the insurance
Make a claim. If there is an occurrence resulting in a loss that’s covered by the policy, claims for the insurance are made. Information is passed to the insurance company about what has happened. The insurance company checks that it’s covered under the policy, and if it meets with the claim then, they pay you as agreed.
Types of Insurance
Life insurance: Under life insurance, the insured family is financially compensated in case of untimely dismissal. This type of insurance is necessary for a breadwinner or someone who has a lot of financial responsibilities.
Health insurance: this insurance covers the cost of expensive medical treatments. The charge paid here usually covers hospitalization, treatment and medical cost Different types of health insurance policies gives coverage for a lot of ailments and disease. There is insurance for different disease and for specific ones.
Car insurance: This is an important insurance policy for every car owner. It protects against any unseemly incident like accidents and natural disasters like floods and earthquake. The insurance company compensates for damages to the car during natural calamities like floods or earthquakes. It also covers third-party liability where the insured has to pay for damages to other vehicle owners in cases like a road accident.
Education Insurance: education insurance can be a great way to provide a huge sum of money to cover educational expenses. You can estimate the amount of money that can go into higher education funding
Home insurance: This insurances help to cover loss or damages caused to your homes like fire, earthquake, lightning and other natural home accidents. Home insurance is necessary for all home owner.
Investing in the right insurance policy involves good research. Insurance can be bought offline as well as online, be it life insurance, health or general insurance and there are insurance agents who will help you buy a policy. Also, there are websites that you can buy a policy from.