Insurance Promise Of Reimbursement

Insurance Promise Of Reimbursement



Insurance Promise of​ Reimbursement
The word insurance,​ on​ a​ broader sense means ‘Promise of​ reimbursement in​ the​ case of​ loss; paid to​ people or​ companies so concerned about hazards that they have made prepayments in​ the​ form of​ premium to​ an insurance company’.
In principles,​ insurance dwells on​ assumptions such as
1. the​ losses and consequences are uncertain
2. Rates of​ losses are fairly quantifiable and predictable
3. Losses are not calamitous
4. Losses are substantial
This unambiguously infers that speculative risks such as​ those involved in​ stock investments and gambling are not covered.
Very broadly,​ insurance can be said to​ be having two categories; one Life Insurance and two Non Life Insurance.
Life Insurance
Life insurance is​ generally meant to​ be covering the​ risk of​ ‘life insured’s’ life for a​ predetermined sum,​ which is​ called the​ ‘sum assured’ to​ be paid either upon death occurring within the​ term of​ the​ insurance or​ upon expiry of​ the​ term itself. as​ a​ matter of​ fact,​ most of​ the​ life insurance policies are based and developed on​ this premise.
Non Life Insurance
The instrument non life insurance refers to​ insurance policy for anything other than life insurance. However,​ the​ principles are pretty much the​ same and sum assured and premium values are estimated in​ the​ similar way. Nevertheless,​ there exist two major differences between life insurance and non life insurance. They are
1. the​ premiums payments are calculated on​ the​ basis of​ depreciating value of​ the​ insured property,​ each time. This invariably means that premiums get increased every time to​ cover up for the​ depreciation in​ the​ value of​ insured property.
2. the​ premiums paid over the​ period of​ the​ insurance are generally not guaranteed to​ be accumulated for payback at​ the​ end of​ the​ term unless otherwise explicitly expressed in​ the​ policy document.
A Few Non Life Insurances
Take a​ few examples for non life insurances here.
1. Unemployment insurance against job loss
2. Celebrity insurance against their intangible assets teeth,​ legs etc.
3. Health and dental insurance
4. Employees group insurance by their employers
5. Vehicle,​ house owners’,​ machineries insurance
6. Insurance for goods in​ shipment
Why Life Insurance
This is​ especially important to​ understand as​ many people tend to​ disregard insurance as​ something not of​ high importance. But in​ reality,​ insurance always covers your dependents when you​ are no more. it​ indemnifies your kin from your liabilities,​ such as,​ particularly,​ home loans. as​ a​ matter of​ fact,​ wiser step would be,​ higher the​ liability,​ greater is​ your insurance cover. Insurance are also instruments of​ tax deductible investments.
No matter the​ insurance companies are making huge profits,​ they are covering your life which is​ all the​ more important.




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