Insurance is a financial tool that protects individuals, families, and businesses from unexpected risks.
It is a contract between the insured and the insurance company. The insurer agrees to provide a financial payment or benefits in exchange for regular payments.
Insurance can give you financial peace of mind. Knowing that if something unexpected happens, there will not be a huge bill that cannot be paid.
How insurance works
Policyholders pay their insurers regular premiums, typically on a monthly or yearly basis.
In case of a covered event, the insured can file a claim with the insurer. The insurer investigates the claim and provides financial compensation or benefits.
It is important to read and understand the terms and conditions of the insurance policy you select. Each policy will have specific rules about what is covered, what is not covered.
Insurance works on the principle of pooling risks. Many people pay premiums to the insurance provider, and when someone makes a claim, the money from the premiums is used to compensate them. This way, individuals are protected from large financial burdens that they might not be able to manage on their own.
There are different insurance policies for different risks. For example:
Life insurance provides financial support in the form of a death benefit. The death benefit can be claimed when the policyholder dies.
Medical or Health insurance
Health insurance covers medical expenses including hospitalization, medications, and preventive care.
Accident insurance offers financial protection in the event of an accidental injury, disability, or death caused by an accident.