Insurance is a contract between an individual (or entity) and an insurance company. It provides financial protection or reimbursement against losses from unforeseen events, such as accidents, illness, or property damage. In exchange for this coverage, the insured pays a regular premium.
Health Insurance: Covers medical expenses.
Life Insurance: Provides financial support to beneficiaries in case of the insured person's death.
Auto Insurance: Covers damage to vehicles and liability in case of accidents.
Homeowners or Renters Insurance: Protects against damage to property or belongings.
Travel Insurance: Covers trip cancellations, medical emergencies, and lost luggage during travel.
A premium is the amount of money that an individual or business pays periodically (monthly, quarterly, annually) to the insurance company to keep the insurance policy active. The premium amount is determined by various factors, such as the type of coverage, the insured's age, health status, and risk factors.
A deductible is the amount of money the insured must pay out-of-pocket before the insurance company pays a claim. For example, if you have a Rs500 deductible on your auto insurance and a repair costs Rs2,000, you would pay the first Rs500, and the insurance company would cover the remaining Rs1,500.
A claim is a formal request made by the insured to the insurance company for payment or compensation for a covered loss or event. Once the claim is submitted, the insurance company reviews the details, assesses the validity, and, if approved, pays out the claim amount according to the terms of the policy.