Recents in Beach

What is insurance ?

What is Insurance ?

Insurance is an legal agreement between an insurance company and the insured in the form of a insurance policy to protect the insured at the time of contingency by paying up the insured amount, the insurance company has promised to give on behalf of the premium the insured has paid earlier.

The individual or insured or the policyholder pays a premium to the insurer or the insurance company and in return the insurer promises to pay up the cost of all the contingent events occurred. 

The contingent events include death of the policyholder, accident, damage or destruction to the property, illness etc.

How does Insurance work ?

The insurance company or the insurer receives the premium from the insured with a legal agreement called insurance policy.

A premium is the amount of money paid by the insured to the insurer.

The insurer promises to pay up a certain amount of money called insured money or claim money against the premium.

The insurance company receives premium from many insurer and a very few of them actually end up claiming the insurance.

The insurance company invest the money in FDs, CDs, bonds, stocks, debt securities, gold and many other financial instruments and make more money.

Generally the loss or money claimed by the insured under the insurance policy is settled by the insurers with the premium they receive from many policyholder.
What is insurance
What is insurance

Types of Insurance

There are so many types of insurance available in the market. Here are the some major insurance

  • Life Insurance : Life insurance or personal insurance covers the life of the individual or policyholder. The name itself suggests, it is the insurance of life. It protects your dependent family and provides financial stability in the event of your death. If you are the sole breadwinner for your family, you must buy a life Insurance policy. Under this insurance policy, the nominee is compensated at the time of the death of the policyholder.
  • Health Insurance : As the name suggests, the insurance is for health. When you buy a health insurance, it covers you from many diseases and ailments by paying up the costs of expenses made towards treatment. You can buy either generic health policy or critical illness policy. The premium may vary with different types of policy.
  • Car Insurance : Car insurance is taken for the vehicles you own. Car insurance protects you from cost of the damage occurred due to accident. It also covers and protects you from third party liabilities like damage done to the other vehicle owners. It covers damage done due to natural calamities like floods, earthquake etc.
  • Home Insurance : Home insurance covers damage done due to fire, floods, earthquakes, lightning etc. All people dream of their own home to be safe and for that they should buy home insurance.
  • Education Insurance : In education insurance policy, the future of your child is secured. You pay premium for the child's education insurance and your child's higher educational expenses is covered through giving you a lumpsum amount at the time of maturity. In the instance of any unfortunate happens to you, the company pays the life cover amount to the nominee and also pays the remaining premium for the policy term to ensure your children's future is secured.

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