What is Insurance

Insurance is a contract between you (the policyholder) and an insurance company (the insurer). This contract provides you with financial protection against potential losses or risks. 

The agreement states the terms of when and how much premium you must pay to avail of such protection. In addition, it includes the circumstances that qualify for claiming the insurance amount. You can get insurance policies to protect:

  • Yourself
  • Your family
  • Your assets 
  • Your vehicles

You can also get protection for other commodities and assets, depending on your issuer and the policy you choose. 

Apart from individuals, employees can also avail of insurance policies through their companies or businesses. Businesses can also get insurance for the protection of:

  • Employees
  • Shop or workspace
  • Against financial loss
  • Raw material and other cargo 
  • Against cybercrime, etc. 

How Does Insurance Work?

The insurance policy documents include all the conditions under which the insured individual or nominees get a sum from the company. To provide this financial support, the insurance companies charge a premium. 

The companies decide the claim and premium amount based on applicants’ eligibility, age, existing debt, health habits and risks, among other factors.

Types of Insurance

Here are some examples of different types of insurance available: 

  1. Health insurance
  2. Life insurance
  3. Car insurance
  4. Education Insurance
  5. Home insurance
  6. Travel insurance

FAQs on Insurance

What do you mean by insurance?

It is a legal contract under which the insurance company provides monetary protection to the insured in case of any unfortunate circumstances. 

What are the common types of insurance?

Here are some common types of insurance available: 

  • Health
  • Life 
  • Automobile
  • Home

What is a premium in insurance?

It is the fixed amount an insured pays to the insurer to keep their policy active.

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