Top FAQs Regarding Insurance Policies
Top FAQs Regarding Insurance Policies: The popularity of insurance is spreading like wildfire as awareness is growing. People realize that in this day and age of mounting expenses and flaring inflation, insurance is definitely the way to go! In order to make it a little easier to understand, here are some FAQs which will surely render complexities of insurance uncovered!
Q.1. What exactly is insurance?
Insurance, in simplest of terms, is a contract which two parties enter into. The company providing insurance agrees to guarantee of compensation in the event of a loss, damage, illness etc; in return for a specified premium. It is a means of protection against financial loss.
Q.2. Are there different kinds of insurance?
Well, yes! There are different kinds of insurance available. Some of the broad categories are:
·Property and Casualty
This type of insurance manages risk and provides protection to the homes and property of individuals.
·Social Insurance
Social insurance offers employment insurance as well as that for workers compensation and safety. These programs are typically sponsored by the government.
·Life and Health Insurance
Life insurance provides financial protection in the event that a family member dies. When the insured family member passes away, a lump sum is then paid to the bereaved family, and enables them to stand on their own feet. Health insurance provides cover in case of disability, disease and accidents. Life and health insurance are advisable, but not mandatory.
Q.3. How does it work?
Insurance policy works on the basis of regular payments, known as “premiums” being paid to the insurer. When a claim is made, the insurer is bound to pay for the loss that has been incurred, as per agreed terms.
Q.4. If I don’t make any claims during the year, do I get my money back?
No. In case no claims are made during the year, the premiums paid by you are then pooled into the fund of premium being paid by all policyholders.
Insurance uncovered aims to increase the understanding of people that are thinking about taking out an insurance policy. In most circumstances, they prove to be very helpful, however, it is important that you survey and find out what’s best suited to you.
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