What is Insurance?
Insurance is a way of protecting your financial interests. Anything of value can be insured. So, your life, health, and assets can be insured. Assets could range from property, to vehicles, to art, etc. This is what happens when you enter into an insurance contract:
Premiums are more affordable than paying for damages/replacement. Insurance companies calculate probabilities and absorb risk by insuring a large pool of people in exchange for premiums. From this pool, only a handful would need compensation within the contract term. Essentially, this works out to be a win-win situation for both the insured and the insurance company.
Types of insurance
- Life Insurance: Life insurance insures a person against death and general insurance caters to protecting assets from theft or damage. Life insurance replaces the Insured’s income after their untimely death.
- General Insurance: General insurance mitigates large financial costs like hospitalization expenses, medical treatments, claims arising from lawsuits, repairs to damaged property, loss of property, etc.
- Health Insurance: Health insurance provides for hospitalization expenses and treatment costs.
- Vehicle Insurance: Vehicle insurance is mandated by the government of India and covers loss or damage to the insured vehicle.
Other things you can insure:
What is life insurance and advantages of life insurance?
Life insurance is a contract between the insured and the insurance company. The insurance company will make a payout to the insured person’s nominee/ family in the event of untimely death in exchange for life insurance premiums. When we truly understand the value of our lives, we will understand that premiums are a small price to pay for financial security.
Why we should take insurance
Health complications, death, and accidents may arrive without any notice. Being insured is a smart choice. We all know that there is no way to tell when setbacks will fall upon whom. In the wise words of Benjamin Disraeli, it’s better to hope for the best and prepare for the worst. By paying premiums, with the right insurance products you can manage risk, be financially secure, and have peace of mind at a very affordable rate. What a compelling reason to insure and be sure!