(2024) What is insurance? Types | how to buy

What is insurance :- Insurance protects a person or a group of persons or a thing or a company from financial loss caused by a particular risk. An insurance policy creates a fund by contributing a certain amount called the premium. The premium is collected by the insurance company monthly or annually from the policy holder as per the policy type and company norms.

An insurance policy is a legal contract document between the policyholder and the insurer (the company that provides insurance). 

Importance of insurance

  • Insurance is essential to everyone who is thinking of protecting their family/ property/ assert or things from financial risk or loss.
  • Insurance policy details also provide tax benefits.
  • Nowadays, every insurance company provides many investments and savings schemes along with regular coverage. It will give our future generations financial security.
  • Home Insurance policies can also protect your home from unexpected damages. You can even have insurance coverage for the damaged items inside the house.
  • Insurance can also help the family financially due to the unfortunate death of an earner in the family.
  • Insurance policies for home can also help in paying medical bills.
  • Insurance promotes economic growth by investing in saving schemas. In fact, the most innovative way to secure life these days is getting insurance.

Read also:- (2023) How long does a car insurance claim take to settleย 

Types of Insurance policies

  1. Life Insurance: Life insurance is generally of two types. One is term insurance. It provides insurance only after death, and the other is whole-life insurance. It includesinsurance along with savings.
  • Health Insurance: Health insurance provides hospital bills, doctor fees, and medical bills up to 80 percent.
  • Disability Insurance: It is beneficiary for those who work in some risky areas. If a person becomes disabled while working, then it will help that person financially.
  • House owner’s insurance: Such insurance policy information provides insurance to the house and some valuable items in the place in case of any damage due to theft, fire, accident, or earthquake.
  • Automobile Insurance: Automobileinsurance is the most commonly taken policy by everyone. The best insurance policy covers bodily injury, vehicle damage, and medical payments due to accidents.
  • Property Insurance: No business these days is starting before taking property insurance. It covers insurance for fixed machinery, building, inventory, etc.
  • Malpractice Insurance: These types of policies are generally taken by professionals like lawyers, doctors, and accountants.
  • Liability Insurance: These types of policies cover over vulnerability to losses from the damage of necessary machinery due to power loss or anything.
  • Umbrella Insurance: Itโ€™s a kind of personal liability insurance that is in excess of standard policies.

How to get an insurance policy?

In the current scenario, life is full of uncertainty, so being insured is more important. Let us discuss in detail about how to get best insurance policy.What is insurance

  • Anyone can get an insurance policy through a broker or a corporate agent, or an individual agent.
  • At present days many mobile applications are also available to get an insurance policy. But it would be best if you double check it, whether it’s safe or not to get insurance using a mobile application.
  • One can also buy a policy directly from the insurance company. Many of the insurance companies are providing e- services also at your doorstep.
  • Regardless of the channel that you have chosen to buy a policy, it would help if you were very careful. Make sure that you are dealing with an authorized company.
  • The company must be NAIC licensed. The National Association of Insurance Commissioners is the Insurance policy regulatory authority.
  • You need to check the information, terms and conditions, benefits as well as risks before buying a policy.
  • Get clarify all your queries from the health insurance marketplace before buying or claiming the policy.

Significant parts of Insurance policy (What is insurance)

As we know that an insurance policy is a legal document between the insurance company and policy holders, and you need to know and understand some critical things about your policy. The basic insurance policy contains the following items.

  • Declaration page: It is the first part of any insurance policy. It gives information about the person who is taking the approach. It also covers the risks, Policy period, and policy limits. The declaration page also covers the amount you need to pay, the number of premiums, and the insurance number.
  • The Insuring Agreement: The government health insurance plans  contain a brief explanation of the promises made by the company and tell what is to be recovered. It also talks about the terms and conditions of the policy. There are two important things to be known in the Insuring agreement: Named perils coverage and All risk coverage.
  • The Exclusions: It is one of the important things to be known. This page tells us about the Excluded losses, excluded property, and Excluded perils.
  • Definitions: Some insurance policies have a definition section which tells about the terminology in the agreement.
  • Endorsements and Riders: These things can be changed or modified during policy renewal.

How to review an insurance policy?

It is easy to review your insurance policy at any time. All you need to do is just to contact your insurance agent or a company to obtain a copy of your insurance.

How to claim Insurance?

  • Fill up the form provided by the Insurance company
  • Submit the policy documents
  • Along with the Policy documents you need to submit the documents that company asked
  • Do reassignments, if any
  • Submit the ID proof of the policy holder or policy nominee.
  • The rest of the insurance claim process will be done by the Insurance company.

Terms and Conditions before claiming Insurance

Terms and conditions will change from company to company and policy to policy. You can get that info from the agent or from the best Insurance company. If you claim your policy before the due date, then you may lose some amount.

How long does an Insurance claim take?

Insurance companies will reach you within 24 hours to 5 days to claim your policy. But to recover your money, the company will take time. You can get your policy money only after completing all the verification and legal procedures by the company.