Insurance What We need to know about it.

Insurance What We need to know about it.

Insurance is a contract (policy) or a legal agreement between two parties namely the insurer and the insured. The Insurer refers to the insurance providing company who undertakes to compensate or provide financial coverage during contingency, while the insured is the subject of the insurance that is being covered against the risk. The insured maybe a person or a property.

Insurance is a way of managing risks in our life. It is a way of protecting ourselves from a financial loss. A worry less life is experienced if you have an insurance contract for some contingencies, knowing that during contingency time there will be a financial assistance to be received, which will help you to recover faster.

Understanding Insurance

Insurance Terms

Premium – is the policy price that the insured needs to pay to the insurer regularly either by monthly, quarterly of Yearly. Premium price is determine by the insurer based on some factors and been agreed by the both insurer and insured.

Policy Limit – refers to the maximum amount that an insurer will pay to the insured during the contingency.

Deductible – The deductible is the amount that the policyholder needs to pay before the insurer pays the claim.

How Insurance Works

1. The insurer and the insured stipulate an agreement on the insurance policy. Both the insured and the insurer should affix their signature to the said contract to make it valid and incontestable.

2. Insured’s obligation is pay the premium stated in the policy every  due date as per agreed, be it Monthly, Quarterly or Yearly.

3. Insured must see to it that he abides all conditions stated in the policy.

4. In the event that the something happened to the insured; then it will be the obligation of the insurer to pay the policyholder.

• The insurer will pay the beneficiary the lump sum amount stated in the policy upon the death of the insured. This is for the Life Insurance.
• The insurer will pay the medical bills when the insured party is having medical issue. This is for health insurance.
• For home insurance, the insurer will pay the policy holder when something happen to your home.
• For educational Insurance the insurer will pay the policy holder when the time stipulated in the contract / policy matures.

Why is insurance essential

Reasons why insurance prove to be essential:

1. Insurance is essential because it gives us a feeling of protection during the time that we loss someone due to unfortunate death. The financial loss of the family due to the death of the sole earner can be covered by the insurance plans.  The insurance money or proceeds will secure your family financially. You will not worry for all coming expenditure in case of death.
2. Insurance plans will help you pay for medical emergencies, hospitalization, contraction of any illnesses and treatment, and medical care required in the future.
3. Insurance plans will help prepare the future of your child in terms of his/her education. Having educational plan insurance will make sure that your children are financially secured while pursuing their education.
4. Insurance protect your home in the event of fire or unforeseen calamity or damage. Your home insurance plan will help you pay the damages and cost for repair for rebuilding the said damages.
5. Some insurance plans come with savings and investment schemes apart from its regular coverage. The said savings and investments will soon be converted to cash which will be released to the policy holders at a specified time.

Types of Insurance Policies

• Life Insurance: refers to the insurance plan that protects your family in case of death. Life insurance secure your family financially with a lump sum amount that will paid out in the event of death of the policy holder, within the policy period.

• Health Insurance:  refers to insurance plan intended for covering medical expenses arise due to  various health issues, including hospitalization, treatments and so on.

• Educational Insurance: Refers to insurance plans that are savings in nature that will help in generating lump sum funds upon reaching a certain age for pursuing higher studies.

• Home Insurance: refers to insurance plans that cover any damages to the home on account of accidents, and natural calamities

• Auto Insurance: refers to insurance plans for vehicles, including cars. This is a vehicles protection plan against accidents and mishaps, damages to third parties, and natural calamities.

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