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Life insurance is insurance that prays money after a person suddenly dead. This money gets her/his family member after her/his death.

What Is Insurance?

We have all heard a lot about insurance. As a general perception, insurance is something that supports you or the things you have insured to sustain a large financial loss. But there is more than just what you think is capable of taking a loss. We will look at this in more detail.

In technical terms, it is a form of risk management for the insured entity to transfer the cost of potential losses to another entity in exchange for a small financial compensation. This compensation is called a premium. In short, it is like paying a single sum to the entity to protect yourself from possible future losses. So when something unfortunate happens, the insurer helps you fix the situation.

Why do we need insurance?

Everyone has this question in mind: do I really need protection? Life is full of surprises; Some good, some bad. You must be prepared for the worst situations that come your way. It helps you create that sense of security and peace. There can be many reasons why you may need help, such as a serious illness, a natural disaster, or the untimely death of a loved one. Adequate insurance in such situations provides an important helping hand for your financial situation. Therefore, you have to choose the right type of protection according to your needs.

Type of insurance

Life insurance

Life protection is one of the most traditional forms of insurance designed to protect you and your loved ones from catastrophe. It was originally designed to protect family income. Since then, however, it has evolved as an alternative to conservation or as a security plan. The need for life coverage depends on several factors, such as the number of dependents, current savings, financial goals, etc.

General insurance

Any type of non-life coverage falls into this category. There are different types of insurance that cover all aspects of your life according to your needs:

A. Health insurance

Covers your medical and surgical expenses that may arise during your life. Generally, health insurance provides cashless benefits to listed hospitals.

B. Auto insurance

Covers damages and liability associated with a vehicle (two or four wheels) in contrast to different scenarios. Provides protection against vehicle damage and liability coverage in accordance with the law against the owner of the vehicle.

C. Travel insurance

It covers you for emergencies or damages while you travel. This includes invisible treatment against emergencies, theft or loss of luggage, etc.

D. Home insurance

Provides the contents of the house and/or the contents of the house depending on the scope of the policy. Protect the house from natural and man-made disasters.

E. Marine insurance

Protects the covers of goods, cargo, etc. possible damage or loss during transit. F. Commercial insurance provides solutions to all areas of the industry such as construction, automotive, food, electricity, technology, etc. Risk protection needs can vary from person to person, but the initial work on an insurance policy remains more or less the same.

How does insurance work?

The most basic principle behind the concept of insurance is "shared risk". A large number of people are willing to obtain insurance against certain losses or damages and for this they are willing to pay the desired premium. This group of people can be called insurance-pool. Now, the company knows that the number of applicants is very high and, at the same time, the need for insurance coverage is almost impossible for everyone. In this way, it allows companies to raise money at regular intervals and to figure out when and where this condition occurs. The most common example of this is car insurance. We all have auto insurance, but how many of us have claimed it? Therefore, you pay for the probability of loss and you are insured and will be paid if the given event occurs.

So when you buy an insurance policy, you pay the company a regular amount as the policy premium. If and when you decide to make a claim, the insurer will pay for the damages covered by the policy. Companies use risk data to calculate the probability of an event; you are looking for insurance to make it happen. The higher the probability, the higher the policy premium. This process is called a subscription. Companies only look for the real value of the entity that is insured according to the insurance contract between the parties. For example, if you have insured your manor house for Rs 50 lakh, the company will only consider the real value of the house and will not accept the amount of emotional value that the house can hold for you, as it is impossible to value emotion.