Insurance Insurance

Some Little Facts about Insurance

What is the meaning of insurance?

Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. It is defined as the fair transfer of the risk of a loss, from one entity to another, in exchange for payment.

Principles of Insurance

Insurance includes pooling funds from many insured entities to pay for the losses that some might incur. The Insured entities are therefore protected from risk for a fee, with the fee being reliant upon the frequency and severity of the event occurring.  In order to be insurable, the risk insured against must encounter definite characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a leading part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

3 Common types of Insurance

- Life Insurance
An agreement between an insurance policy holder and an insurer, where the insurer promises to pay an assigned beneficiary a sum of money or more known as the benefits upon the death of the insured person. Counting on the contract, other events such as terminal illness or critical illness may also activate payment.

- Car Insurance
Car insurance, also known as Auto insurance, vehicle insurance, GAP insurance, or motor insurance, is insurance bought for cars, trucks, motorcycles, and other road vehicles. Its primary use is to give financial protection against physical damage and bodily injury caused from traffic collisions and against liability that could also arise therefrom.

- Business Insurance
Coverage created to protect against loss exposures of business firms, as opposed to those of individuals.
Business Insurance is divided up into two categories: commercial insurance and personal insurance. Commercial insurance is mostly defined as those insurance products for assets and liability. Although businesses can take out health and life insurance for their employees, these do not belong under the group commercial lines, but rather long term personal insurance.

Commercial insurance covers the assets and liability of a business and not an individual, even though individuals qualify for their assets. Insurance commercial provides for those risks associated with operating businesses and thus include a wide range of products.

3 Benefits and  3 Advantages of Insurance

The Benefits
-    It sets free those insuring from the worry and anxiety they may have about how they would encounter the cost of risk.

-    Business men will be more willing to risk their money

-    Insurance also can help in actually decreasing losses

The Advantages
-    Risk Cover – Today, life is full of uncertainties, in this scenario, life insurance guarantees that your loved ones can continue to enjoy a good quality of life against any unexpected event.

-    Planning for life stage needs – Life insurance not only supplies for financial support in the event of unexpected death but also moves as a long term investment. You can meet your dreams, be it your children's education, their marriage, building your dream home, or planning a relaxed retired living, according to your life stage and risk appetite.

-    Tax Benefits – Insurance plans gives attractive tax-benefits for both at the time of entry and exit under most of the plans.

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