Learn about Insurance : What is Insurance? How many types of insurance? Which will be better for you? - Save Money Students

Thursday, April 1, 2021

Learn about Insurance : What is Insurance? How many types of insurance? Which will be better for you?

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 What is insurance? 

Insurance is a contract. Typically, insurance is a contract to transfer certain risks of potential loss of life, property, or property in exchange for money. It is a legal agreement between the two parties. One party enters into an agreement with a guarantee that the other party will pay compensation. The other party is bound by the contract with the assurance of paying premiums at a fixed rate for compensation. An agreement between the first party insurer and the second party policyholder guaranteeing compensation and premium payment, respectively. In technical terms, risk management is a type of contract through which the insured ențity transfers the cost of potential losses to another entity in exchange for a small financial compensation. This compensation is called the premium. This is part of risk management to avoid unforeseen losses.

There are many types of insurance. There are many insurance options and many financial experts will tell you that you need to deal with all of these.  Determining which insurance you really need is a very difficult task. But you need to know about it before you take out insurance.  You will have to pay a fixed premium of insurance and you will get a refund if you make a claim to the insurance company in case of any future financial loss.  So we need to get insurance to reduce our own life risk.  However, before getting insurance, we need to know how many types of insurance are available in the market. So let started.

1.Life Insurance 

Life insurance is the insurance that is done on people's lives. Life insurance is a contract between the insurance company and the insured person where at the end of a certain period the insurance company promises to pay a certain amount to the insured or his family member after his death. In a word, it refers to the insurance that is taken out for the risk of life. 

The great advantage of the insured is peace of mind. Because he knows that his family or heirs will not have financial problems after his death. 

Remember that the insurance company has to abide by certain terms and conditions of the customer. If a war or suicide causes death, the insurance company will not pay any money.

  • 2.Property/ Home Insurance

Property Insurance provides you protection against unfortunately the fire broke out, In case of theft of anything, and some bad weather damage. These insurances are provided in case of damage to the house due to natural calamities like tornados. In addition, insurance is provided for a number of other reasons, such as earthquakes, floods, and nuclear disasters. Commonly used hazards include catastrophic events such as fires, lightning, explosions, and thefts.

3.Health insurance

When it comes to insurance, the most widely taken in the world today is health insurance. Health insurance is a type of insurance coverage that covers you for expenses incurred in various medical and surgical treatments. A coverage insurance company provided by it has taken out this insurance to protect you from unforeseen medical expenses that may occur in the future. The need for health insurance plans is increasing day by day along with the cost of healthcare. Health insurance claims can be settled in two ways. It is either paid to the insurer or paid directly to the care provider. 

In this developed world, almost all these people take out this insurance. Especially those who do it in Europe, America, the Australian continent, and some countries in Asia.

4. Car /Auto Insurance 

Motor/auto/car insurance protects your vehicle (car, truck, bus, etc.) against damage or loss due to unforeseen risks. It basically covers financial losses arising from accidents, thefts, or natural/man-made disasters. In a word, motor insurance is the financial assistance reimbursed to the car owner or third party in accordance with the laws of the insurance company in case of any damage to the vehicle for any reason or any third party damage caused by the vehicle. 

5. Travel Insurance

One of the most popular insurance policies is travel insurance, which plays a big role for travelers. Travel insurance is often done to compensate for any unforeseen loss or damage that may occur while traveling. Most travel insurance policies usually cover costs that can be recovered due to trip cancellation, baggage reduction, theft, a medical issue, or even hijacking. Although this policy does not guarantee protection, it does provide protection against unforeseen losses due to unforeseen events. It gives a sense of security when away from home. Nowadays, many countries have made travel insurance compulsory for visitors. Travel insurance is usually based on the frequency of travel and a person can buy it for a single trip or for multiple trips. Most policies provide 24-hour emergency assistance during your travels, especially when traveling abroad.

6. Fire Insurance 

Another type of insurance related to home insurance is fire insurance. Fire insurance is a type of insurance that covers the loss or damage caused by a fire in a property or insured person's home and is compensated by the company. In other words, in this insurance policy, a person pays a certain amount (called the premium) to the insurance company from time to time, and in return, the company helps when the person loses his property due to a fire. Fire insurance is important insurance for both home and business. This is because it helps to protect against damage/loss due to fire, especially in the industrial sector like petrochemicals, where there is a high risk of fire. This insurance policy also provides alternative property and asset prices, which are damaged due to fire. Therefore, it can be said that there is a relationship between fire insurance and business insurance, home insurance, business insurance.

7. Marine Insurance

Marine insurance is a policy to cover ships, cargo, boats, etc. against various damages and losses. This insurance policy is issued for incidents such as damage to the vessel, accident of cargo vehicle, loss or damage due to sinking of the ship, etc. That’s why getting back-up as marine insurance is always beneficial. In a word, the contract that the insurer executes with the guarantee of compensation in case of damage to the vessel, ship's goods or freight insured by a certain danger is called naval insurance or marine insurance.

Apart from this, there are many other insurance policies such as Liability Insurance, Guarantee Insurance, Social Insurance, etc. But the most important of these are life insurance, health insurance, home insurance. Another one you can keep as optional. For example, suppose you have a desire to travel. Then you can have travel insurance which will help you if you have any problem while traveling. If you have a car you can insure the car, unfortunately, if the car is damaged in an accident the insurance will be helpful. 

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