How Insurance makes our lives better

Insurance is a contract, in which an individual or group gets protection against losses.

The company in charge is called an insurance company. The company pools clients' risks to make payments more affordable for the person insured.

An insurance policy is the contract that you take out with an insurer to protect you against specific risks under agreed terms.

Purpose of insurance
Due to the unpredictable nature of life insurance is aimed at reducing and making accidental losses manageable.

A small fee known as an insurance premium is the substituting payment made to a

professional insurer for the promise of a higher pay in the event of a larger and  greater loss.
The company pools clients' risks to make payments more affordable for the insured.

What are the principles of insurance?

In the insurance world there are  fundamental principles that must be met they include an

 Insurable interest,

Utmost good faith,

Proximate cause,

 Indemnity,

Subrogation and

 Contribution.

Insurance is  a legal and much needed financial relationship and as such is highly encouraged.

Insurance plans are highly useful to anybody looking to protect his or her family  and loved ones against impromptu financial loses as it covers from medical emergencies to hospitalization and retirement.

There is also a huge need for life insurance if you are the breadwinner of a family and your family would suffer a huge loss in a case of an untimely death

Without life insurance to pay off business debts, your family members might struggle to keep and maintain your investment or be forced to sell it.

you pay for medical emergencies, hospitalization, contraction of any illnesses and treatment, and medical care required in the future.

How Insurance Works

There are numerous types of insurance policies available and anyone or business can always find an insurance company willing to insure them at an amazing price.

The most common types of insurance are usually

Home Insurance

Life Insurance

Health Insurance

Car Insurance

It is always very necessary to have at least one of the following insurance policies. countries like the united states has car insurance as a compulsory insurance policy.

Business on the other hand require special types of insurance depending on the particular type of business.

There are also insurance policies for very specific needs example professional liabilities which can also be known as errors and omission insurance

A complete understanding of how insurance work is going to be very useful when choosing an insurance policy in other to select one that best suits your need .

In order to select the best policy for you or your family, it is important to pay attention to the three critical components of most insurance policies—the deductible, premium, and policy limit.

Premium

This is expressed as a monthly cost and is determined by the insurer based on you or your business risk profile.

. However, different insurers may charge different premiums for similar policies. So finding the price that is right for yourself is required ³

Policy Limit

The policy limit is the maximum amount an insurer will pay under a policy for a covered loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life of the policy, also known as the lifetime maximum. The maximum amount the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary upon the death of the insured.

Deductible

This is  a specific amount the policy-holder must pay out-of-pocket before the insurer pays a claim. Deductibles serve as deterrents to large volumes of small and insignificant claims.

Deductibles can apply per-policy or per-claim depending on the insurer and the type of policy. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims.

Special Considerations

With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles.

Though the annual premium is higher than a comparable policy with a higher deductible, less expensive access to medical care throughout the year may be worth the trade-off.

The life and property of an individual are surrounded by the risk of death, disability or destruction. These risks may result in financial losses. Insurance is a prudent way to transfer such risks to an insurance company.

because there’s an uncertainty regarding happening of the event. The insured pays a premium in return for the promise made by the insurer.  

Education Insurance

The child education insurance is akin to a life insurance policy which has been specially designed as a saving tool. 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 and gains entry into college (18 years and above). This fund can then be used to pay for your child’s higher education expenses. Under this insurance, the child is the life assured or the recipient of the funds, while the parent/legal guardian is the owner of the policy. You can estimate the amount of money that will go into funding your children’s higher education using

There are various factors based on which an insurance company calculates the premium of an insurance policy. The idea behind is to check the eligibility of an insured individual for the specific type of insurance policy that he/she wants to buy.

For example, if you are healthy and do not have a medical history of getting treatment for severe bodily diseases, you will likely to pay less for health insurance or life insurance policy than someone suffering from multiple ailments. 

You should also know that different insurance companies may ask for different premiums for similar types of policies. So, selecting the right one at a price you can afford does require some effort.