What is Insurance, it’s benefits and components

What is Insurance, it’s benefits and components

What is ‘Insurance

Insurance is a contract in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Insurance policies are used to prepare for financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party. (Third Party Insurance)

There are different types of insurance policies available. The most common types of personal insurance policies are auto, health, and life insurance policies. Many people in the United States have at least one of these types of insurance.

Businesses require special types of insurance policies that insure against specific types of risks faced by the particular business. There are also insurance policies available for very specific needs, such as kidnap and ransom, medical malpractice and professional liability insurance.

Two of the most important components of all insurance policies are the premium and the deductible. An understanding of these two concepts will help you choose the policy that is best for you.

The premium is simply the price, typically expressed as a monthly cost. The premium is determined by the insurance company based on your, or your business’, risk profile. For example, if you own several expensive automobiles and have a history of reckless driving, you pay more for an auto policy than someone with a perfect record. However, different insurers may charge different premiums for similar policies.

The second component is the deductible. Whenever you make a claim, you are required to meet a minimum out-of-pocket expense, or deductible, before the insurance company pays for your losses. Deductibles can apply per-policy or per-claim depending on the insurer and the type of policy.

Policies with very high deductibles are typically cheaper because the high out-of-pocket cost means insureds are less likely to make small claims.

Insurance is something that should be embraced by everybody. In third-world countries however, people find it very difficult of insuring their properties because of the fact that they think of what will happen to the money they paid (Premium) if the event they are insuring does not happen. This has resulted in very low turn-up of Insurers in these countries.

The main BENEFIT of Insurance is that it minimizes your loss and makes it affordable and easier for you to recover. It makes you feel relaxed even in the midst of the troubles knowing that you are covered.

Even you have a “third party Insurance” , it covers even third parties affected by your loss. e.g in event of an accident.

I do really wish you the best in your en-devour …

Posted on November 7, 2017

1 Comment

  1. Best Insurance Companies In Las Vegas, United States says:

    Yelp, I have been a customer with Safeguard Insurance LLC, formerly known as American Best Insurance Agency, since I was driving at 18; my parents have been customers longer; the former

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