What is Insurance – Insurance is the weapon to deal with the possibility of any loss in future. We do not know what will happen tomorrow, so we try to compensate for the possible loss in the future through an insurance policy. Insurance means protection from risk. If an insurance company insures a person, then the insurance company will compensate for the financial loss caused to that person. Similarly, if the insurance company has insured a car, house or smartphone, then in the event of breakdown, explosion, loss or damage of that thing, the insurance company gives compensation to its owner according to the pre-fixed condition.
What is Insurance
Insurance is actually a contract between the insurance company and the insured. Under this contract, the insurance company takes a fixed amount (premium) from the insured and pays the insured person or company compensation in case of any loss according to the terms of the policy.
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Two types of insurance :-
1. Life Insurance
2. General Insurance
1. Life Insurance:
Life insurance means that on the death of a person who buys an insurance policy, his dependent gets compensation from the insurance company.
If the head of the family dies prematurely, then it becomes difficult to manage the expenses of the household. To save the wife / child / parents etc. of the main person of the family from the financial crisis, it is necessary to take a life insurance policy. Financial Planning
2. General Insurance
General insurance includes vehicles, houses, animals, crops, health insurance, etc. Home Insurance: If you insure your home with a general insurance company, then there is protection of your home. After purchasing an insurance policy, if your house suffers any kind of damage, then the insurance company pays for it. Coverage from any damage to your home is included in this insurance policy. Damage due to natural disaster to the house includes loss due to fire, earthquake, celestial lightning, flood etc. Artificial disaster includes theft in the house due to theft, fire, fighting and riots etc.
In India, it is very important according to the law to insure a vehicle running on the road. If you drive your vehicle on the road without insuring it, then the traffic police can fine you. According to the motor or auto insurance policy, the insurance company gives compensation for any damage done to the vehicle. If your vehicle has been stolen or caused an accident, then auto insurance policy can help you a lot.
Nowadays the cost of treatment is increasing very fast. The insurance company covers the cost of treatment in case of illness when taking health insurance. Under the health insurance policy, the insurance company gives the amount spent on treatment in case of any kind of disease. The extent of expenses incurred on a disease depends on your health insurance policy.
Travel insurance protects against loss during a trip. If a person goes abroad for some work or to travel and he gets hurt or the goods are lost, then the insurance company gives him compensation. Travel insurance policy is valid only from the beginning of your journey till the end of the journey. Different insurance companies may have different conditions for a travel insurance policy.
According to the current rules, every farmer who takes an agricultural loan is required to buy crop insurance. Under the crop insurance policy, the insurance company gives compensation to the farmer for any loss to the crop. Under the crop insurance policy, compensation is given by the insurance company in case of crop failure due to fire, flood or due to some disease.
Business Liability Insurance:
Liability Insurance is actually to compensate for the loss of a company’s work or any product to the customer. In such a situation, the penalty incurred on the company and the entire cost of legal proceedings has to be borne by the insurance company that does Liability Insurance.
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