Insurance
Imagine this- You’re up at 2am chugging caffeine as you race to finish your assignment that
is due tomorrow [Link] in your haste, you knock over you coffe cup right onto your
laptop rendering it [Link] you could either– a)have no insurance,get scolded by your
parents, and buy a whole new laptop (even the cheapest costing atleast 20,000) or b)have
gadget insurance and a brand new laptop for a fraction of the cost.
The second option seems more appealing right?
Simply put insurance is like a safety [Link] the off chance of an unfortunate event,
insurance– represented by a policy– provides finanical reimbursemnt against losses to an
[Link] are bound to be uncertainties you cannot [Link] is the safest risk
management tool to have against these uncertainties.
How it works
Insurance works on the principle of risk [Link] means combining the risks of many people
into one collective fund, so that if anyone experiences a loss the financial impact is shared
among the [Link](insured) pay a small amount called a premium into a common
[Link] insurance compay(insurer) uses this fund to pay for claims that are covered by the
[Link] you don’t make a claim during the specified policy period,no benfits will be paid to
you.
Golden principle
These are principles that make insurance fair,trusthworthy and make sure iit isn’t
[Link] are 7 core principles
1. Utmost Good Faith(Uberrimae Fidei)-Both the insurer and insured must be honest and
disclose all necessary [Link]-Hiding a preexisting illness in health insurance can
lead to claim rejection.
2. You can only insure something if you suffer a financial loss form [Link]-You can insure
you rhouse,not your friends.
3. Indemnity-Insurance should restore your financial position,not increase [Link]-If a
phone worth 50,000 is stolen, youll be compensated not more than 50,000.
4. Contribution-If the same asset is insured with various insurers,each pay its fair share
of the [Link] policies covering the same house share the payout proportionally.
5. Subrogation-The insurer has the right to recover the amount tehy paid to you from the
person responsible fpr the [Link]-If someone chase sinto you r car teh insurer can
claim compensation from them.
6. Proximate Cuse-The insurer compensates only if the main reason of loss is covered in
the [Link]-If you crash your care due to heavy rain and the policy includes
accidents, the insurer pays.
7. Loss Minimization-The insured must take reasonable steps to reduce teh loss,even
after the [Link]-If your shop catches fire you should try to put it out,not wait for
the insurer to pay.
Types of insurance
Insurance can be boradly categorized into two parts
1)Life Insurance:It provides a sum paid to named beneficiaries when the insured
person [Link] main aim is to financially protect dependants and make sure they can
manage expenses like education and living costs even if the insured person is no
longer [Link] insurance policies are long term i.e they span over years and
[Link] include plans like endowment(insurance+saving elements),term
life(death benefit only),whole life(lifelong cover+savings)etc.
Life insurance is very [Link] provides financial security foryour loves ones
incase something unfortunate happens to [Link] ensures your love dones dont have to
face any financial hardship if you are no longer around to suppor them
2)General Insurance:It covers risks other than life i.e it protects
assets,health,travel,vehicles etc from unexpected [Link] are typically short term
and renewed yearly.
General insurance has many benefits ranging from finaical security to legal
[Link] policies cover finaincal losses and compensate for llosses proviiding
you with financial [Link] general insurance plans are mandatory by
[Link]-Motor Vehicles Act,1988 makes it amdnatory to have an insurance on your
motor [Link] insurance plans allow tax benefits which lowers your tax
liability and helps save tax.
Insurance might seem like an adult topic,but its really about being smart and [Link] a
world full on uncertainties insurance allows us to protect both people and belongings from
unexpected loss.