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What is insurance and why needed?

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What is insurance and why needed?

Insurance is a legal agreement between two parties – the insured and the insured.  Insurance is a legal agreement between two parties, Such as insurance company (insurer) And individuals (insured). In this case, in the event of an accident insured by the insurance company, Promises to compensate the insured. This is also known as insurance coverage or insurance policy. Death of a person’s life and property, Surrounded by the risk of disability or destruction. These risks can lead to financial losses. Insurance is a wise way to transfer such risk to an insurance company. Based on the insurance terms, In the event of an insurer incident, Pay a lump sum to the policyholder / nominee. A specific type of insurance policy is preferred, Based on personal needs and life goals. An insurance policy has different components, Whose firm conviction is for your needs, It helps a lot to choose the most suitable plan.

How does insurance work?

The insurer and the insured are a legal contract for insurance, Which is called insurance policy. In an insurance policy the insurance company will pay the sum insured to the insured or the nominee, There are details in such conditions and situations. Insurance is to protect yourself from financial loss And a way to protect your family. Generally, the premium for a large insurance cover is much lower in terms of the amount paid. The insurance company takes this risk of providing a higher cover for a smaller premium. Because very few insured people actually claim insurance. The insurance company takes this risk of providing a higher cover for a smaller premium. Because very few insured people actually claim insurance. This is why you get insurance for a large sum at a lower price. Any person or company can ask for insurance from the insurance company, But the decision to provide insurance is based on the consideration of the insurance company. The insurance company will evaluate the claim application to make a decision. Typically, insurance companies refuse to provide insurance to high-risk applicants.

How many types of insurance:

Life insurance and general insurance are the two main types of insurance coverage. General insurance can be further subdivided. Which is divided into different types of policies.

1) Life Insurance: You can take out life insurance to protect the family due to untimely death or death during the term of the policy. In case of untimely death of the insured, it pays a lump sum to the family. It helps the bereaved family to cope with the financial crisis. Which may occur in the absence of an earner.

2) General insurance: Policies other than life insurance are considered as general insurance policies. This includes insurance coverage for home, health insurance, auto insurance, education insurance, etc.

General insurance type:

1) Health insurance: Health insurance is a contract, For which an insurer has to pay some or all of the cost of a person’s healthcare in exchange for a premium. More specifically, health insurance usually pays for medical, surgical, prescription medications and sometimes the cost of the insured’s teeth.

2) Vehicle insurance: A car insurance policy covers the cost of damage to your car due to accident or even theft. This can lead to actual damage to your vehicle. To reduce the cost of this unforeseen event, You need a car insurance policy.

3) Travel insurance: Travel insurance is coverage that covers the risks that may occur while traveling. And designed to protect against financial loss. Risks Minor disadvantages such as missed airline connections And from delayed luggage to more serious problems, including injuries or major illnesses.

4) Property insurance: Property insurance is an insurance, Which protects business or household goods and equipment against damage from theft, fire and any other hazards. … Generally, property insurance covers the risk of all losses due to fire, theft, wind, smoke, snow, lightning, etc.

Insurance benefits: 

1) Provides protection: Insurance coverage reduces the impact of losses, Which carries in a dangerous situation. It provides financial compensation in times of financial crisis. This does not only protect the insured from financial problems It also helps to examine the resulting stress.

2) Provides assurance: Insurance coverage gives policyholders a sense of reassurance. The insured pays a small portion of the income for this guarantee, Which will help in the future. ‍So, there is a guarantee of handsome financial support as opposed to premium. This will protect the policy buyer in the event of an accident, danger, or any vulnerability.

What are the primary benefits of an insurance policy?

-Perfect cover for your family after you leave
– Compensation benefits
-Tax benefits
– Financial assistance after retirement
-For specific purposes
-For stable business operation

What are the disadvantages of an insurance policy?

-Difficult terms document
-Long legal formalities

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