What is insurance and why is it necessary?
Note the point is the Insurance is a legal contract between two parties: the insurer and the insured. Insurance is a legal contract between two parties, that is, the insurance company (insurer) and the individual (insured). In this, the insurance company undertakes to cover the loss of the insured in the event of an insured accident.
And It is also known as an insurance coverage or policy . A person's life and property are surrounded by the risk of death, disability, or destruction. These risks can lead to financial losses. Insurance is a smart way to transfer that risk to the insurance company. Under the terms of the insurance, the insurer pays a lump sum payment to the policyholder/nominee in the event of an event occurring. Choosing a particular type of insurance policy is based on individual needs and life goals.
An insurance policy has several components, a solid understanding of which goes a long way in choosing the plan that best suits your needs.
How does the insurance work?
insurer and the insured enter into a legal insurance contract which is very important part of this, called an insurance policy. The insurance policy details the terms and conditions under which the insurance company will pay the sum insured to the insured or nominees.
Insurance is a very wonderfull or great way to protect yourself plus your family from bad financial loss and problems. In general, the premium for major insurance coverage is much lower in terms of the amount paid. Insurance companies risk paying high coverage for a small premium because so few insured people actually make insurance claims.
That's why you get insurance for a higher amount at a lower price. Any person or business can seek insurance from an insurance company, but the decision to provide insurance is at the discretion of the insurance company. The insurance company will evaluate the claim request to make a decision. Insurance companies generally refuse to provide insurance to high-risk applicants.
Types of insurance:
Note the point is the Life insurance and the general insurance are two main types of insurance coverage or policys. General insurance can be classified into subcategories that are divided into different types of policies.
1) Life Insurance:
You can obtain life insurance to protect your family from premature death or death during the term of the policy. Pays a lump sum to the family in the event of the premature death of the insured. Helps the bereaved family cope with the financial struggles that can occur in the absence of a breadwinner.
2) General Insurance:
Non-life Ananya policies are considered general insurance policies which include home insurance coverage, health insurance, auto insurance, education insurance, etc.
Below are some common types of insurance;
1) Health Insurance:
Health insurance is a contract that requires an insurer to pay part or all of a person's health care costs in exchange for a premium.1 expenses to the insured.
2) Vehicle Insurance:
An automobile insurance policy covers expenses for damage to your vehicle due to accidents or even theft. These situations can cause actual damage to your vehicle. To reduce the cost of these unexpected events, you need a car insurance policy.
3) Travel Insurance:
Travel insurance is coverage designed to protect against risks and financial losses that may occur during travel. Risks range from minor inconveniences, such as missed flight connections and delayed baggage, to more serious problems, such as serious injury or illness.
4) Property insurance:
Property insurance is insurance that protects the physical assets and equipment of a business or home against loss due to theft, fire and any other danger. … Generally, property insurance covers all risks of loss caused by fire, theft, wind, smoke, snow, lightning, etc.
1) Provides Protection:
Insurance coverage reduces the impact of losses incurred in dangerous situations. It provides financial compensation during the financial crisis. It not only protects the insured from financial problems, but also helps manage the resulting stress.
2) Provides Certainty:
Insurance coverage provides a sense of peace of mind to policyholders. The insured pays a small part of the income for this certainty that will help in the future. Therefore, there is the certainty of a good financial support against the premium. This policy will protect the buyer in case of accident, danger or any vulnerability.
What are the main benefits of an insurance policy?
- -Perfect coverage for your family after you're gone
- -Compensation and benefit
- -Tax benefit
- -Financial support after retirement.
- - For specific purposes
- -For a stable business operation
What are the disadvantages of an insurance policy?
- -Hard terms document
- -Long legal procedures