Insurаnсе іs а соntrасt bеtwееn twо раrtіеs whеrеbу оne party called insurer undertakes in exchange for a sum called premiums, to pay another party happening of a certain event.
Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance Companies collect a premium to provide for this coverage. A loss is paid out of the premium collected from the insuring public. The insurance Company act as a trustee to the amount collected through premium.
Insurance is categorized into three categories:
(i) Life (ii) Health (iii) General (iv) Car & Much more.
To get insurance an individual or an organization may approach an insurance Company directly, through Insurance Agent of the company or Intermediaries.
Advantages of Insurance
1. Safeguards one’s family for demands and oneself
2. Peace of mind-in case.
3. Encourage saving.
4. Tax Rebate.
5. Protection in the claim made by lenders.
6. Safety against the home loan, a personal loan or other kinds of loan.
7. Supply agriculture businesses, women, and child with a protection cover.
Reasons for buying insurance
Insurance Buys Time, and Money People like to refer as time insurance, the reason being that insurance proceeds are paid to the insured’s beneficiaries or about the policy’s maturity. The money proffered by it helps buy time to adapt to the change of circumstances. Insurance offers large amounts of money that will keep the lifestyle it was before the insured’s death.
Insurance Offers Peace of Mind For the person who buys an insurance policy, it offers complete and absolute peace of mind. She or he understands that the decision will provide sound benefits in the long run, whether or not the individual may live to see it. The life insurance policy will subsequently prove this later on when and if funds are needed. This is the guarantee of the insurance contract.
Multiple Applications The future is uncertain for everyone. No one knows how long he or she will live. The investment benefit is paid to the insured’s beneficiaries after his passing, or it may be used during the life. Life insurance policy owners can turn to the cash value of the policy in the event of a financial emergency when all avenues are blocked or denied. They understand that they could avail of loans based on their insurance policies.
The policy owners can use the cash value of their policies to meet their long-term financial needs as well. They may have purposefully spent to use the money to the policy for their children’s future marriage expenses or higher education fees.
Enduring Elasticity Since life insurance is flexible enough to serve several needs; the insured may keep several long-term goals when he or she invests in the insurance program. The policy’s cash value can be allocated towards augmenting the monthly income. Leisure years must be turned into pleasure years. Life insurance is designed on the theories of flexibility.
Financial Security The insurance coverage offers people when they buy life insurance, looking for peace of mind guarantees. Life insurance provides complete financial security. The purchase of life insurance demonstrates concern for the future well-being of a family.
Regard for Family The cost of life insurance displays concern and care for the people the policy owner loves.
Insurance is Safer No financial institution can perform exactly what life insurance does. Any business can not back its products as sound as those of the insurance industry with surplus and reserves.
The proof of strength and safety that insurance companies have ensured even under the most adverse of conditions is a matter of pride for the entire insurance industry. For generation after generation, life insurance has been acclaimed as security’s very standard against which the industries are measured.