What is insurance and why is it necessary?

What is insurance and why is it necessary?

What is insurance and why is it necessary?
Insurance is a contract. This is a legal agreement between the two parties. One side is bound by the agreement by guaranteeing compensation to the other side. The other side is bound by the agreement by guaranteeing a premium at a fixed rate for the compensation. A contract between the first party insurer and the second party insurer guarantees the payment of compensation and premiumrespectively. Life insurance does not cover the loss, no value in the life of a person. So financial security is provided in the case of life insurance.

The insurance industry plays a very important role in the economic development of any country. Insurance collects small premiums for the public and helps them build capital. Guarantees compensation for human life, debt and property. Such assurance will help people to feel secure and concentrate on their work. As a result, individual production increased. Thus, the increase in individual production increases the national production. As production increases, the quality of life of the people improves and the country’s economic growth as a whole. Example: Life insurance contract, fire insurance agreement.

What is the benefit of insurance?
Insurance benefits:

  1.  It protects life and wealth.
  2. It creates capital.
  3.  It is old age and age.
  4.  It gives peace of mind.
  5.  It provides money to the business.
  6. It reduces inflation.
  7. It provides security for social property.

What are the insurance steps?

The steps to insurance are:

  • The insurance company’s sales representative or website would be informed of the customer’s various plans and review edited plans: to choose the choice.
  • Apply ingout to the prescribed form of insurance company to accept the choice of insurance customer.
    Reviewing the application and submission of the insurance company’ documents: Making the decision to write down the insurance company.
  • Paying premium stake by insurance customers after the insurance company has received the decision.
  • The insurance contract is finalised by the insurance company through FPR after the insurance customer pays the premium.
  • Collecting insurance documents by the customer after the completion of FPR by the insurance company.

What’s the premium?

Insurance premiumist is the insurance premium for the insurance contract to pay compensation or claim to the insured. Insurance insurance companies pay insurance claims when the insured person dies on the specified expiry or before the expiry of the term. The definition of premium in the analysis of the different views of experts is as follows:

“The insurance agreement says that the insurance holder receives a fixed amount of money from the insured or a certain period of time or a one-time payment from the insured in exchange for the promise of a future uncertainty or risk of financial loss or payment of the insurance claim to the insured person’s own or other life or property. ”

In life insurance, premiums are usually collected in annual installments. However, there are also monthly, quarterly, monthly premiumpayments for the benefit of the insurance recipient.


What is the total insurance number?

Life insurance is the subject of people’s lives. No life can be determined. So in the case of life insurance, the amount of financial benefits that an insurance company provides in exchange for a certain amount of premium is called the sum assured.

6: How is the premium rate fixed?

The Insurance Act, 2010 will determine insurance premiums. The premiums dependon on: insurance account, insurance tenure, age of insurance subscriber, office expenses, mortality table, commission costs, etc.

7: What is the insurance plan?

The scheme, which is designed by the Executive, is called the Insurance Plan, which provides insurance customers with the benefits, what benefits, what benefits, what are not at risk, the various conditions, etc. Example: Term plan, temporary plan.

8: What is the profitable/non-profit/term plan?
Profitable plan: For life insurance policy, the insurance holder has to pay the insured money at the end of the term

  • The bonus is paid, called a profitable insurance policy or a profitable plan.
  • Non-profit Plan: Insurance only insured money after term for life insurance policy
  • He is also called a non-profit insurance policy or a non-profit plan or a non-bonus plan.
  • The premium rate for such insurance plans is very low.

Term Plan: Insurance plan is to pay the insured after the insurance contract dies, no financial benefit is available if the insurance holder survives until the end of the term. Premium rates are very low in such insurance plans.

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