What is insurance?
Definition of some words related to insurance
In a word, insurance is approach of safety from financial loss. Insurance is a form of risk managing which mainly used to prevaricate against the risk of a dependent, unsure loss. Insurer: Insurer is an entity which provides insurance. Insurer is also known as insurance company. Sometimes we also called it insurance carrier.
I know, you have heard the word insured or policyholder. What does referred by insured? The answer is: An insured or policyholder is a person or entity who buys this insurance. The insurance business deal involves the insured assuming certain. It is known comparatively little loss in the form of payment to the insurer. This loss may or may not be financial. But always this loss must be reducible to financial terms. It must engage something in which the policyholder or insured has an insurable interest recognized by possession, ownership or pre-existing association. The insured or policyholder receives the insurance policy. This policy describes the total conditions as well as circumstances under which the insured will be financially rewarded.
Now we will learn about the ‘premium’. Premium is the amount of money which is charged by the insurer for the coverage set forth in the insurance policy. The insured or policyholder submits a claim to the insurer or insurance company for processing by a claims adjuster, if the policyholder or insured experiences a loss which is potentially enclosed by the premium or insurance policy.
What is general insurance?
We know that life is not a bed of roses. Actually life is full of risks and this thing makes our life exciting and interesting. But it is also true that some unpredicted events can set you back. In these circumstances, general insurance can help us to protect ourselves. It actually helps us to protect the things we value for example: our homes, cars, financial impact of risks, big and small fire, flood, earthquake, storm, to thefts, car accidents, and travel mishaps and sometimes from the costs of legal action against us. We can also choose the types of risks we wish to cover by choosing the accurate type of policy with the feature we need.
Generally, insurance works by spreading the expenditure of unpredictable risks among a huge number of people in the similar area who contribute to same risks. You pay a monthly or annual premium when you take out an insurance policy. This money joins the premiums of other policyholders. And thus it goes into a huge poll of funds. If you are lucky, you will never need to draw on that poll but if you happen to be one of the unlucky persons who affected by an unpredictable calamity, that pool of money can be used to assist you up to the limit you have particular in your policy.
When things go wrong, depending on the terms of your policy, your insurance company or insurer may either replace or repair the items that have been lost or damaged,. Not only these but also you may have the preference of receiving a money settlement for the amount of cash agreed in your policy.