A type of contract which is represented by a policy. The insurance company pays financial accumulation to the policyholder in case he experienced some kind of loss. The company collects funds from all of the policyholders and pays the one person who is bearing the loss.
This is a process which makes insurance money easy to pay to the victims of losses.
Insurance Eligibility
People can ensure their house, car, life and any kind of asset. Which means if the policyholder gets in any kind of accident and gets injuries then the insurance company will pay for the damage.
In case of any kind of property damage, the company is there to pay you.
Functioning methods of insurance
There are many insurance policies that are available for any person or a business in the market. These companies insure an individual or a company for price.
Some common policies of insurance are health, house, car and life insurance policies. In America the law enforces every person to have a policy on their car.
Many businesses get insurance policies in case of any mishaps in the future.
Examples
Restaurant : while making food if a staff member burns himself from the restaurant’s stove the insurance will pay for injuries.
Hospital : a medical insurance policy covers any loss in case of any negligence from the hospital or doctor.
A company hires a specific insurance company to cover all the insurance policies of their employees. The terms of the policy may differ according to their agreement. The law requires businesses to have an insurance policy ready to cover any additional expenses.
Some main aspects of Insurance
Many companies are providing insurance. All of them differ from each other. Each insurance policy comprises three main categories.
● Insurance premium
● Deductible
● Policy limit
Insurance premium
This is a monthly cost of insurance. Which is based on different factors. The policy makers keep these factors in mind to set a premium for insurance policy.
Automobile premium
This is to keep track of your automobiles. Your previous credit history etc.
House insurance premium
It contains the total value of your assets. Such as house, location, personal stuff etc
Medical insurance
The health insurance claims are usually on the basis of age, location, health and coverage etc.
Life Insurance
Companies need your health history, age, sex and coverage amount etc.
Policy limit
It is the maximum amount which the company will pay in case of any kind of loss that policy holder experiences.
Deductible
The total amount which you pay the insurer out of your own pocket. When you do so then you get your claim. This is the rule.
To carry out insurance or not, it is completely your decision. Sometimes the law requires to do so.