What is Insurance

What is insurance ?

Insurance is a legal contract between two parties- the insurance company and the individual (insured), where the insurance company promises to compensate for financial losses due to insured incidental charges in return for the premiums paid by the insured individual. In simple words, insurance is a risk transfer mechanism, where you transfer your risk to the insurance company and get the cover for financial loss that you may face due to unforeseen events.

Insurance Types

  • Life insurance
  • Health insurance
  • Car insurance
  • Educational insurance
  • Home insurance

1) Life insurance

life insurance is insurance behalf of your life. If You buy life insurance to make sure your dependents are financially secured in the event of your untimely expiration. Life insurance is most important if you are the only livelihood for your family members. Under life insurance, the policyholder’s family get financially compensated during life insurance policy.

2) health insurance

Different types of health insurance policies cover an array of diseases and ailments. You can buy a generic health insurance policy as well as policies for specific diseases. Health insurance is bought to cover medical costs for expensive treatments. The policy usually covers treatment, hospitalization and medication costs.

3) car insurance

A car insurance is an important policy for every car owner. This insurance protects you against any untoward story like accidents. Some policies also compensate for damages to your car during natural calamities like floods or earthquakes. It also covers third-party responsibility where you have to pay damages to other vehicle owners.

4) Educational insurance

The child education insurance is similar to a life insurance. An education insurance can be a great way to provide a lump sum amount of money when your child reaches the age for higher education. This fund can then be used to pay for your child’s higher education expenses. You can estimate the amount of money that will go into funding your children’s higher education using Education Planning Calculator.

5) Home insurance

We all dreaming of owning our own homes. Home insurance can help with covering loss or damage caused to your home due to accidents like fire and other natural calamities or perils. Home insurance covers other instances like lightning, earthquakes etc.

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