An Overview on Insurance
Life assures no guarantees; predicting what might happen next in life is nearly an
impossible task. To combat this conundrum, people since the medieval times have
kept a system of ‘insuring’ themselves or their protected interest. The Merriam
Webster dictionary defines insurance as ‘a means of guaranteeing protection or
safety.’ The important question here would be 'safety or protection against what?'
The answer to that would be protection or security against any mishap or loss that
occurs to a person or his possessions. In a day and age where there are more risks
and dangers than ever, it is of utmost importance that one always stays insured.
The entity that provides the said insurance is called an insurer or an insurance
company, and the person who buys the insurance is known as a policyholder or the
insured. The terms of insurance work such that the policyholder provides a small
payment to the insurer, and in exchange for the insurer’s promise to cover the
premium in the event of an unexpected loss. For the insurance to work, the loss
need not be a financial one, but it must be reducible to economic terms, and it must
involve a commodity, possession or a pre-existing relationship in which the insurer
has a vested interest. The contract under which the conditions and the terms of
insurance can be financially compensated is called an insurance policy.
There exists a multitude of insurances because there are a vast number of risks that
can be quantified in financial terms. Specific types of risk that gives rise to claims
are termed as perils. This differentiates the two types of insurance policies, which
are the all-risk policy and the peril policy. An all-risk policy covers almost every
single kind of risk which can be boiled down to financial terms, whereas a peril
policy only includes a certain number of risks which are predisposed in the policy.
India is relatively new in the insurance business. The majority of the population
has a meager capita income, and as a result, do not generally have access to enough
capital to pay premiums for insurances. But as of late a lot of insurance companies
have started providing packages that are readily accessible to the general
population. And with the big players in the insurance business now in India, one
can easily compare insurance policies among the available options and select a
suitable one. Companies also provide many different types of plans based on the
risks and premium. Insurance compare quotes can also differ from place to place
and organization to organization.
Our world is full of risks; any financial or personal act that one undertakes faces a
significant number of obstacles. This, however, shouldn’t be a discouraging factor
for someone pursuing anything that they desire. But in order to cover risks, one
must have the wisdom to have an insurance policy for the said deed. Planning and
anticipating risks and dangers well ahead also helps in minimizing it, and steps
taken to insure minimal risk towards an investment using various types of
insurance policies is an excellent practice.