CLEAR YOUR CONCEPTS ABOUT INSURANCE

Here are some characteristics of Insurance:-

  • Two parties:- In any case of an insurance contract, there are two parties. One of them, whose insurance is to be done and is called the insured and the other who does the insurance and can be called insurer.
  • Two parties:- In any case of an insurance contract, there are two parties. One of them, whose insurance is to be done and is called the insured and the other who does the insurance and can be called insurer.
  • Based on utmost good faith:- Most important thing in insurance is trust which is build between the two parties by being transparent. The insured must give a detailed information about his health or property, whereas the insurer is supposed to explain all the terms and conditions of their company or contract.
  • Free from expected risk:- After the contract is agreed by both the parties, the insured is free from any kind of risk in the unforeseen situation.
  • Based on co-operative system:- In this kind of system, many insured together form a group. The all gather a huge fund and if any member happens to suffer from losses then the collected amount is given to that member of the group to compensate his deprivation.
  • Based on co-operative system:- In this kind of system, many insured together form a group. The all gather a huge fund and if any member happens to suffer from losses then the collected amount is given to that member of the group to compensate his deprivation.
  • Payment of premium:- The insurance company take the whole sole responsibility of the risk, only if some fee is paid by the company, which is also known as insurance premium.
  • Security and investment:- Generally the insurance contracts are security based but life insurance is the only insurance which gives security as well as investment.
  • Various types of insurance:- Insurance are of varied types, based on what the insured wants the insurance for..
  • Happening of the event:- The basic objective of the insurance would be fulfilled only the time if an accident or a mishappening occurs with the insured property.

COMPONENTS OF INSURANCE POLICY

It’s important for any insurance company to know which would be the best policy for it’s customers. So let me clarify some things for you:-

Insurance Premium

An insurance premium is the amount of money an individual or business pays for an
insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the individual or the business may result in the cancellation of the policy.

Policy limit

A limit is one of the most important concepts to understand when you’re considering an insurance policy. An insurance coverage limit determines the maximum amount of money an insurance company will pay for a covered claim.

Deductible

The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer pays a claim. Deductibles serve as deterrents to large volumes of small and insignificant claims. Deductibles can apply perpolicy or per-claim depending on the insurer and the type of policy. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims.

Leave a Reply

Your email address will not be published. Required fields are marked *