What is insurance, how is it?

By | March 10, 2021

On taking health insurance, the insurance company covers the cost of treatment in case of illness.
Insurance is the weapon to deal with the possibility of any loss in future. We do not know what will happen tomorrow, so we try to compensate for the potential loss in the future through an insurance policy.
Insurance means protection from risk. If an insurance company insures a person, then the insurance company will compensate the financial loss to that person.
Similarly, if the insurance company has insured a car, house or smartphone, then in the event of breakdown, break, loss or damage of that thing, the insurance company gives compensation to its owner according to the pre-fixed condition.
Insurance is actually a contract between the insurance company and the insured. Under this contract, the insurance company takes a fixed amount (premium) from the insured and pays damages to the insured person or company in the event of any loss according to the terms of the policy.

Insurance is generally of two types:

Life Insurance
General Insurance

Life insurance covers the life of a person.

Life insurance:

 Life insurance means that on the death of the person who bought the insurance policy, his dependent gets compensation from the insurance company.
If the head of the family dies prematurely, then it becomes difficult to manage the expenses of the household. To save the wife / child / parents etc. of the main person of the family from financial crisis, it is necessary to take a life insurance policy. In a financial plan, it is suggested to first buy a life insurance policy.

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