What is Insurance

      3 Comments on What is Insurance

Hello friends,

Today we are going to learn the following concepts:

What is Insurance?

What is insurance policy?

What is insurance premium?

What is insurance company?

We all heard these words frequently but don’t know the exact meaning of this. So, today I’m going to explain few words about this in layman language.

What is Insurance?

The life of an individual is always surrounded by the risk of death or disability. These risks may result in financial loss. In order to cover such losses insurance concept came into existence.

Insurance is a legal agreement between two parties i.e. the insurance company (insurer) and the Individual (insured). Here the insurance company is promising to bear the risk of insurer on happening of the contingency.

Contingency: Occurrence of loss i.e. death or disability.

What is Insurance

What is insurance policy?

A legal document between the insurer and insured, which contains an agreement details like Duration, amount of premium, mode of premium payment, specific risk etc.,

What is insurance premium ?

The insurance premium is defined as the amount of money the Insurance company is going to charge from you for the insurance policy you taken.

In general it depends on small calculation, and also based on some your personal information like age, location, amount insured etc.,

What is insurance company?

A profit or non-profit or Government company that offers insurance policies to the public either by selling directly to individual or indirectly entered into Employee’s benefits plan, that provides coverage in the form of compensation resulting from loss, damage, injury.

3 comments on “What is Insurance

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