What is Insurance?
The insurance policy is an agreement among a person (the insured) and an insurance company (the insurer).
It assures that the insurance company will partially cover the insured’s loss, provided that the policyholder (the insured) meets given conditions stipulated in the insurance agreement.
The insured then pay a premium to receive the indemnity policy.
In case the policyholder (the insured) goes through any loss covered by insurance, such as an automobile crash or a home fire, then the policyholder (the insured) files a claim for reimbursement, with the insurance company.
The insured (policyholder) will pay a deductible to cover a portion of the loss, along with that insurance agency will pay the remaining amount.
What is an insurance policy?
Insurer: The person/company who is offering indemnity policy.
Insured: The person/business who has purchased the indemnity policy.
When we buy the Insurance policy, we always think that we will never be in need to use it.
In our life, for one thing, or another we all get protection at some point.
Whether it is for the car, home or health, to make a barrier alongside the risks of any big or small financial losses.
Coverage plans are used to cover the damages and keep our finances safe and sound.
Benefits of Insurance in General
Before choosing a coverage plan, you must know how indemnity will benefit you in future.
Most essential modules of any indemnity plan are deductible and premium.
It is best to get complete knowledge about these two modules of the coverage plan before making any decisions.
Indemnity contracts are different from other types of contracts.
These agreements are uniquely designed to meet specific needs.
Coverage policies developed on standard forms.
They feature a language related across a wide-ranging for different kinds of coverage policies.
Premium is the monthly amount, which is charged by an assurance agency on a monthly basis.
The insurance companies specify the premium amount depending on your business and company risk profile.
Insurers charge different amount of premiums for the same type of policies, based on person to person and business to business.
That’s the reason; it requires some legwork to find the right priced coverage plan for yourself.
The Deductible is the second most significant module in any indemnity policy.
A deductible is a specified amount of money which you (the insured) are required to pay, before making a claim.
Once your deductibles are received, the insurance company will pay your claims.
Deductibles depend on the type of indemnity policy that you have purchased from the insurer and can apply per-claim or per-policy base.
Cheaper coverage plans include high deductibles.
Because the insurer has to pay substantial cost from their pocket, which results in small claims.
Types of insurance
Mostly life coverage, health coverage, auto insurance, property coverage and casualty coverage are used in the USA.
Among all of these types of coverage, Life, Health and auto coverage are the most common.
Health insurance includes medical coverage, dental coverage, vision coverage and others.
Life insurance contains accidental death coverage, dismemberment coverage, long-term care coverage and hospital coverage.
In Property and Casualty coverage also known as P&C insurance includes:
- Property indemnity covers flood, home, fire, earthquake, pet boiler and title related coverage.
Whereas Casualty insurance policy as indicated from name covers errors and omissions, disability, liability and workers’ compensation related coverage.