The Insurance & Its Various aspects

What Is Insurance?
Insurance is a contract, represented by a policy, in which an individual or an entity receives financial protection or reimbursement against unexpected financial losses from an insurance company after paying the premiums. In other words Insurance is a contract (policy) in which an insurer compensates the insured against losses from specific contingencies or perils after paying the premiums.

What is an insurance company?
The insurance company is that creates insurance products or policies to take on risks in return for the payment of premiums. The insurance industry safeguards the assets of its policyholders by transferring risk from an individual or business to an insurance company. Insurance companies act as financial intermediaries in that they invest the premiums they collect for providing this service. Insurance company size is usually measured by net premiums written, that is, premium revenues less amounts paid for reinsurance. There are three main insurance sectors: property/casualty, life/health and health insurance. Property/casualty (P/C) consists mainly of auto, home and commercial insurance. Life/health (L/H) consists mainly of life insurance and annuity products. Health insurance is offered by private health insurance companies and some L/H and P/C insurers, as well as by government programs.

Why is Insurance Important?
All of us wish to achieve financial freedom at some point in our life, and when it comes to doing that, we tend to believe that our savings are enough to be financially stable. But, if you look at life from a practical
perspective, you would understand that savings alone are not enough to achieve financial freedom; insuring yourself & your assets with an insurance policy is equally important. However, some people believe that they do not require any insurance policies as they can save enough money to replace their assets should anything happen to them. But, consider a situation when you have to wipe off all that you’ve saved all your life, just to pay for your medical bills or a car that is damaged beyond repair.

How to choose an insurer or an insurance company?
There are many insurance companies operating in every country, so choosing between them can be a big
challenge. Here are the main points to keep in mind when selecting an insurance company.

• Should be legally Licensed:
  When you are looking for an insurance company you should choose a properly licensed insurance company by the competent authority of the country. In USA the insurers’ licenses issued by state insurance department therefore you have to make sure that the chosen insurer is licensed in your state. To find out which companies are licensed you can check the website of the licensing- authority
• To choose to best Price (deal):
  Many companies sell insurance policies and prices vary greatly from one to another, so it really pays to shop around. Get at least three price quotes from different companies, agents and from the Internet. Almost every country’s insurance authority may publish a guide that shows what insurers charge for different policies in various countries.
• Financial Solidity & stability of the insurer:
  You should choose an insurance company to buy your insurance which is financially sound for man years by using ratings from independent agencies. If you are confident about the financial stability of the insurance company then you rely easily to protect your financial interests.
• Service standards of the insurer:
  The service part is also very important in insurance industry that basically include after sales service. In the event that you need to file a claim or have any questions or concerns, finding an insurer with excellent customer service is essential. Take into account the customer service’s accessibility, the insurer’s speed, and the calibre of the customer service agents.
• Comfort level & peace of mind:
  You might already know the importance of insurance in providing security and stability. For example, when you purchase car insurance, you know you’re protected in the event of an accident. The same goes for getting homeowners insurance, health insurance, and life insurance — these types of policies assure that if something bad happens to you or your family, help will be available. You should also find out about the service level of an insurer by speaking to their existing customer or can search reviews on the internet about the same insurer you have intended to buy a policy from. If their reputation is customer friendly easy to reach for query or provide you guidance in filing claim if it needed. This will you comfort and peace of mind pf mind both.

To be continued….