What is Insurance ?

What is insurance ?

Very easy and normal definition of  INSURANCE 

Very many definitions are there but best and top definitions are here

1. Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

2.Insurance is mean of protection from financial loss, its from of risk management ,  primarily used to hedge against the risk of a contingent or uncertain loss.

3.Insurance is legal contract between two parties like the insurance company its call (insurer) and the individual its call(insured) wherein the insurance company promises to compensate for financial losses due to insured contingencies in return for the premiums paid by the insured individual,

4.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.

How does insurance work ?

The basically concept of insurance works on the basis of risk pooling. when you but any type of insurance policy from the insurance company for specified period with specification period with specific cover, you will make regular payments towards the policy, similarly, insurance company collects premium from all of its clients and pool the money collect to pay for losses arising out of an insurance event. in case the uncured even takes place, and you make a claim, losses will be compensated by the insurance from the pool of policyholder premiums. in case you didn't make a claim during the specification policy period, no benefits will be paid to you.

Types of insurance

There are various types of insurance available.

1. Life insurance.

2. Health insurance.

3. Motor insurance.

4. Accident and disability insurance.

5. Home insurance.

6. Standalone critical illness insurance.

7. Travel insurance.