Insurance – All Fundamentals
Insurance is a way to provide protection against financial loss in a wide variety of situations. It is an agreement where one party agrees to compensate the other party for financial losses arising from a specified event.
Insurance applies to the principal of loss-sharing. If you wish to have insurance, for any type of loss, agree to pay regular, so-called premiums, to the insurance company. Over and over again, the company offers you a contract, an insurance policy. The Company promises to pay a certain amount of money in the form of losses specified in the policy.
Insurance is thousands of years old. The Code of Hammurabi, a Babylonian code of 1700 BC, is believed to be the first form of credit insurance. The borrower would not have to repay the loan if his misfortune made it difficult to do so. Insurance as we know it today could be followed by the Great Fire of London in 1666, which destroyed 13,200 homes. After the disaster, Nicholas Barbon opened a property guarantee office.
Types of Insurance
Insurance usually covers situations that involve pure risk, that is, situations where only risk can be lost. Such situations include fires, floods, and accidents. People also buy insurance to cover uncommon forms of financial losses such as, a dancer can protect his legs from injury. There are three main types of insurance policies sold:
- Health Insurance
Life insurance provides that the insurance company will pay a certain amount in the event of death. This can be paid in cash or in installments to the beneficiary [people called by the policyholder to receive death benefits]. Some types of life insurance policies enable policyholders to be able to save money. Such policies have a monetary value. The policyholder can borrow money in proportion to the amount of money or provide policy with its value.
These are savings plans sold by insurance companies to provide a stable and standard retirement income. If the annuant owner dies before receiving the guaranteed payment amount, the insurance company must continue to pay to the beneficiary.
Some insurances reimburse part of the premiums in the form of dividends. Such policies are called participatory policies. The insurance company pays dividends if the amount collected from premiums exceeds the amount required to pay the administration benefits and costs. Shares may also include a portion of the profits the company made from the investment made in the premium. Assignments are usually paid in life insurance.
- Private Health Insurance
Health insurance pays all or part of the cost of hospitalization, surgery, laboratory tests, medication and other medical care. The rising cost of medical care has increased the need for adequate health insurance. You can have serious financial problems without such coverage, especially in the event of a serious illness or accident.
Dental insurance is one of the fastest growing forms of health insurance. It helps to pay for various dental services.
- Property and Liability Insurance
People and businesses buy property and credit insurance to protect their assets from financial losses. Property insurance provides direct compensation if the owners’ property is damaged, damaged, or lost as a result of accidents. Credit insurance protects individuals and businesses from the financial losses that may result if their actions result in physical harm to others or damage to property.
The main types of individual coverings are:
This provides protection from losses from damage to home owners and content.
These are the most expensive and most important types of insurance. Drivers are liable for any costs resulting from accidents they cause. This insurance protects the policyholder from losing money in accidents.
Financial performance of insurance companies
The financial stability and strength of an insurance company should be a major consideration when purchasing an insurance contract. The current premium insurance premium offers coverage for losses that may occur for many years to come. For that reason, the performance of the insurance manager is very important. In recent years, many insurance companies have failed to pay off debts, leaving their policyholders without coverage (or only coverage from a state-sponsored insurance pool with a down payment for losses).
How Insurance Is Sold
Many insurance companies sell policies through agents. Exclusive agents are employees of an insurance company who sell only the company’s policies. Independent agents sell the policies of several companies.
And it is very important to consider the flexibility of your policy. What happens if you miss a payment? Does the cover stop immediately, or will you have a “graceful” time to give you time to make the payment? Will you get the money if you cancel the insurance policy?
Also, if you switch to new insurance, will you lose cover for existing problems? This last question is especially important when considering health insurance, as companies will charge higher premiums if you have an existing health problem.
Lastly, remember to update your policy each time you update it. This can be a very important point because it is important that your insurance continues to meet your needs as long as you have them.