What is an Insurance?
Insurance is a kind of cover that deals with the possibility of loss in the future. We can’t predict the future as to what exactly will happen with us tomorrow. So we try to cover the possible loss in the future through an insurance policy. Insurance means protection against risk. It is important to cover yourself with different insurances.
If an insurance firm insures a person under insurance terms, then the insurance firm will repay the financial loss that occurred.
Similarly, if the insurance company when insures a vehicle or a property say a house or smart mobile phone, then in case of damage, breakage, losses, or injury of that thing, the firm gives compensation to its owner or nominee as per the pre-determined condition.
Insurance is actually a contract between the insurance firm and the person or the property that is insured. Under this contract, the insurance company takes a certain sum of money (premium) from the insured person and indemnifies the insured person or the company in case of any damage or losses as per the pre-decided terms of that policy.
How many types of insurance are there?
Generally, there are two types of insurance:
- Life Insurances
- General Insurances
Life Insurance is the insurance of a human’s life. In life insurance, the life of a human being or person is insured. Life Insurance: Life insurance covers the damages which may occur due to the death of the person to their family by buying the insurance policy, his or her dependent gets compensation or repayment from the insurance company.
If the head of the family meets the unfortunate and untimely death, it becomes tough to run the daily household expenses. So, It is advisable to buy a life insurance policy. This will safeguard the wife/children/parents, etc. of the family from a financial crisis.
In financial planning, it is advisable that all the people of the family should buy a life insurance policy.
What is General Insurance? It includes all vehicles, properties mean houses, animals, farming crops, health insurance, etc.
What is Home Insurance: If any person insures their home through a general insurance company, that is simply termed as home insurance. You can protect your house if you have home insurance. Post you buy an insurance policy, if there is any kind of damage to the house, then the insurer compensates for the damages that occurred. Generally, it covers any damage to your home and the policy includes the same.
The damages caused by natural calamity that is damage due to earthquake, fire, flood, lightning & thunder, etc. Even artificial disasters are covered under this policy like damages to the house due to fire broke, steal & theft, Ac fighting-riots, etc.
Motor Insurance: According to the Indian Law and Motor Vehicle Act, it is very necessary to insure your vehicle. There is a fine when you drive a vehicle without valid insurance. The traffic police can fine you for the same. Insurance company compensates for different damages under the motor or vehicle insurance policy. Different companies offer different benefits, however, the insurer compensates for any damage caused to the vehicle. If someone steals your vehicle or the vehicle and the diver meets an accident, then the vehicle insurance policy can also compensate the same.
Third-Party Insurance covers the death of a person due to an accident of the vehicle. If you own a two-wheeler/three-wheeler or car, then you must buy vehicle insurance.