What is Insurance?
Insurance is an arrangement of full or partial financial compensation. This specified the loss, damage, treatment, illness, injury or death caused by events beyond the control of the insured individual or party.
It is a financial contract between an individual and an insurance company. For a certain amount (called premium), an insurances company will take the responsibility of compensating our financial losses. This payment on agreement ensures the policyholder that the Insurances Company will cover some portion of a loss or damage.
How Insurance works?
Insurances work as a safeguard for you and your property against the risk of loss, damage, theft, illness, and death. With insurance, you can choose what you want to protect against. You can buy an insurance policy in many aspects of your life such as health, home, car, business and child future planning. Insurance Policy work as a contract to protect you against specific risks under agreed terms.
When you buy an insurance policy, you pay a specified amount to the Insurer, known as Premiums. Premiums are usually paid in monthly installments, but you may also pay it all at once. If something happens that is covered in the policy, you can claim your insurance. The Insurer checks all the aspects covered under the insurances policy then the insurer will pay out for the loss.
Listed below some common Insurance Terms:
Annuity: It is a contract with Insurer (Insurances Company) that an amount paid to the policyholder or his spouse. In a case of death of both during the policy period, the amount will offer to the next of kin.
Beneficiary: A beneficiary is a person who will receive any insurances benefits, in case the policy holder passed away during the policy period.
Coverage: It is the range of protection provided under an insurances policy. Insurance coverage such as life insurances, health insurances, vehicle insurances and much more covered by the Insurances Company.
Deductible: Deductible is an amount that we have to pay from our own pocket before the Insurance Company will begin paying towards any covered expenses.
Insurer: Insurer is the company that provides the Insurances Cover. The company in an insurance contract undertaking to pay compensation.
Insured: The person or policyholder who will compensate for loss or damage under the terms of Insurances Policy.
Policy: It is a written contract-document between Insurances company and policyholder, which define the terms & conditions of a Policy.
Premium: Premium is when an individual or institution pay a specific amount of money to the Insurer for an insurance policy.