Insurance is an agreement in which an individual or a business pays a company to protect him or her from possible loss or damage in return of a premium. It could be a property or a financial loss.
Insurance policy is a financial product that legally binds the insurance company to pay losses of the policyholder when a specific event occurs. The insurer accepts the risk that the event will occur in exchange for a fee, the premium. The insurer, in turn, may pass on some of that risk to other insurers or reinsurers. Insurance makes possible ventures that would otherwise be prohibitively expensive if one party had to absorb all the risk.
Life is full of uncertainty, it is always good to have a plan for tomorrow. Insurance is planning yourself for tomorrow, you would not know what will happen, you might be sick or most loved one could be having a problem, most importantly all the hard work that you have done to build your life could be shattered in a matter of seconds.
In the practice, if you had an incident it’s the contribution from all the premium collection that the insurance company is paying you. It’s like you have an understanding with a group of ten friends of yours that in bad time they all will stand for you and help. And if something goes wrong with anyone of the group, you will also stand for them in such a case, Insurance Company can be said as the person or the company who set rules, terms and condition to help you for the loss.
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