Definition – Insurance is a bond, described by a policy or plan, in which an insured person or entity gets financial safety or remuneration against damage from an insurance provider or company. The Insurance Company tries to reduce the client’s risk to make payments more economical for the insured person.
An insurance policy is used to fence against damage or financial loss, both small and big, which may result from loss to the insured or their wealth or from injury lead to the third party.
Let’s Know More about Insurance in Details
There are many types of insurance policies available in the market some of the main insurance product categories are health insurance, life insurance, motor insurance, personal accident insurance, home insurance, term insurance, etc.
There are specific insurance plans to suit the individual’s and business need correctly. Businesses need certain types of insurance plans which give protection from specific kinds of risks faced by a particular business. For example, an electronics shopkeeper needs an insurance policy that covers them against any kind of loss due to short-circuit or fire.
An auto dealer does not require this type of coverage but needs insurance coverage for personal accident cover. There is some more specific type of insurance plans like professional liability insurance and medical malpractice etc.
Factors of an Insurance Policy
Whenever you choose an insurance policy it is important for you to understand or check out how an insurance policy works. These three important factors of insurance plans are premium, policy limit, and deductible. Insurance firms who understand all the concepts can help you to choose a better insurance policy that best suits your requirements over different types of insurance policies.
The premium of an insurance policy is something called the cost of a policy, generally represented as a monthly cost. Insurance policy premium is being calculated based on the risk factors of your business profile or individual’s needs. For example, if you own some expensive home appliance then it may cost more insurance premiums to secure your house with insurance.
It is a limit that says the maximum amount an insurance company will give you under insurance-covered loss or damage. The maximum amount that insurance companies will pay may be set per period (for example annual or policy term) per injury or loss, or some policies cover a lifetime known as the lifetime maximum.
It is a certain amount that the insured must pay from his pocket before the insurance company pays a claim. The deductible can be applied per policy or per claim depending on the insurance company and the policy’s nature.
Insurance plans which are very high deductible in nature are generally less expensive due to the more amount paid from the insured pocket.
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Popular Kinds of Insurance Products
1. Health Insurance
It is a kind of insurance cover that gives you protection against any type of loss done due to hospitalization or medical reasons.
2. Life Insurance
It covers life events like if any happened with you accidentally in the future than the amount of insurance cover given to your family members.
3. Car Insurance
This type of insurance covers your car from damage done to your car due to an accident or it also covers loss/damage done to a third party.
4. Home Insurance
This type of insurance coverage helps you to keep your expensive home appliance safe and secure from fire or any unaccepted loss.
5. Critical Illness Insurance
It gives you protection from a critical illness that is not covered under the normal health insurance policy.
6. Corporate Insurance
7. Specific kind of Insurance
This kind of protection is needed when there is no specific insurance available in the market like cancer coverage.
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