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What is Insurance? Why does anyone need insurance?

Insurance is a type of protection from any kind of loss. It is a way of risk management from an uncertain condition.
Why does anyone need insurance?
Owning a home because of lenders need to know that your home is protected entirely.

If something bad happens with your vehicle then a few peoples could afford the cost of repairs, health care, collisions and any kind of injuries.

Maintain your living standard because if anything bad happens to you and you lost your ability to earn.

It covers any kind of vision care, drugs, dental care or other health-related issues.

Provide for your family in the event of a death.

Run a small business or family farm by managing the risks of ownership
Take travel plans without worrying about ticket cancellation or other issues.

Types of Insurance:
1. Life Insurance or Personal Insurance.
2. Property Insurance.
3. Marine Insurance.
4. Fire Insurance.
5. Liability Insurance.
6. Guarantee Insurance.
7. Social Insurance.

1. Life Insurance or Personal Insurance:
Life insurance is a kind of insurance between you and policy company or holder that assure the promises to pay for you at your medical situation or upon your death.

Types of Life Insurance Bonus:
1. Simple Reversionary Bonus
2. Compound Reversionary Bonus

1. Simple Reversionary Bonus:
Simple Reversionary bonus (SRB) is a type of bonus that added to the sum payable on death or maturity of a with-profits assurance.

2. Compound Reversionary Bonus
Compound Reversionary bonus (CRB) CRB is similar to the simple reversionary bonus, the only difference is that each time the bonus is calculated at a rate percent on the sum-assured, plus, previous bonus.

Importance of life-Insurance:
Married or with children- doesn’t matter that you are newly married or you have children who depend on you. for them, you have a clear need for insurance. your uncertain death or loss of your income cause immediate financial difficulties.

singles or married- you are married with children or you are it doesn’t mean that you don’t need insurance. if your parents or some important others depends on your income to run the household as a joint family, then having financial safety is important.

General Insurance:
General insurance is non-life insurance but that doesn’t mean that you don’t need it. It secures your financial losses in any particular event and provides you payments.

Importance of General Insurance:
if you want to live a risk-free life then it is mandatory insurance for you. the risk is associated with everything. It secures your all things that you own.

It will give you peace of mind and also the big reason of why anyone should own general insurance. it is the only weapon against any kind of misfortune.

you will always be ready for any type of uncertain situation.if you insured yourself with the insurance, it seems like you invested your money for not having any kind of accidents.

If you have a car and you take care of it then insured your car is a pretty obvious thing. if your car had insured then for any accidental damage and repair insurance company will pay your bills.

Fire Insurance- Fire insurance is a kind of insurance that covers you again losses caused by fire. purchase of fire insurance over any property insurance give you facilities like replacement, reconstruction, repair. but it excludes things like war, nuclear risks and etc.

Importance of fire Insurance:

The risk of Massive Damage- The flames and smoke caused in the building due to fire and water used to extinguish the fire can destroy the building as well as the stock, and other goods present inside the building.

Restart of Business- In some cases, a fire can even lead to the complete shutdown of the firm due lack of finances to continue the business.

Natural Events- The fire insurances these days not only covering fire damages but it also includes lighting, explosion, aircraft damage etc.

Social Insurance:
Social insurance is a kind of insurance that protect weaker societies who unable to pay their rents. Government insurance providing coverage for unemployed, injured, and old people.

Benefits of Social Insurance:
Social Security provides a guaranteed lifetime income. The best part about these benefits is they never run out.

Retirement- When you retire, Social Security provides a monthly benefit that replaces a significant portion of pre-retirement earnings.

Disability- if you become disabled and no longer able to earn or work, social insurance provides you and your family monthly benefits.

Property Insurance:
Property insurance is a type of insurance that provides you with a financial return on your property and content in the event of damage Property insurance can include homeowners insurance.

importance of Property Insurance:
For most people, buying or building a house is probably the biggest and most expensive investment they would ever make and it is vital that their investment is fully protected. It is important to mention that your property is vulnerable and it can crash down any time by some disaster.

Property Insurance- In its most basic form, property and casualty insurance coverage will provide you with protection against damage to the property from events as diverse as civil commotion, fire etc.

Water Damage Insurance- Having flood and water damage insurance coverage protects against any sort of water damage except for a sewer back up.

Other Forms of Insurance:
beside the insurances we talk about earlier there are many other insurances available out there.

The examples of such insurances are export-credit insurances like that. there are many other insurances.

Miscellaneous Insurance:
Miscellaneous Insurance is a type of insurance that doesn’t include life insurance, fire and marine insurance. It covers a variety of risks, the chief of which are:- Personal Accident insurance.

Importance of Miscellaneous Insurance- Benefits that cover most medical costs incurred while the insured receives treatment as an inpatient. These kinds of benefits usually provided by a group health policy.

Updated: January 21, 2019 — 10:02 am

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