When you pursue financial risk cover and enter into a contract with an insurance broker you become the insured and the insurance firm becomes your insurer. Checkout McEvoy Insurance & Financial Services.
That is the sum of money the insurer agrees to pay in Life Insurance when the insured dies before the predefined period. In the case of non-term insurance that does not include benefits applied. This fixed amount can be named as insurance cover in non-life insurance.
The insured must pay premiums for the financial risk insurance which an insurer offers. This is called Premium. They may be paid on an annual, quarterly, monthly or as determined in the agreement. The average amount of premiums charged is many times less than the insurance cover, so it would make no sense to look for insurance. Factors which decide the premium are the cover, the number of years for which insurance is obtained, the age of the insured (individual, car, etc), to name a few.
The beneficiary who is specified by the insured, if any, is the nominee to receive the assured sum and other benefits. In the case of life insurance it must be other than the insured individual.
The number of years for which you wish protection is the policy term. The term is decided by the insured at the time the insurance policy is purchased.
Apart from the actual cover, some insurance plans can provide additional features as add-ons. Paying additional premiums will take advantage of those. If they were to purchase those apps separately they would be more costly. For example, you might add your life insurance on a personal accident rider.
Value for surrender and pay-up
If you want to leave a scheme before the end of its duration you will discontinue it and get your money back. In this instance the amount that the insurer will pay you is called the surrender value. The policy is no longer in force. Instead if you just quit halfway charging the premiums but don’t subtract money the sum is called pay-up. At the end of the term you are paid by the insurer in proportion to the sum paid up.
Now that you know the language this is in plain words how insurance works. An insurance provider collects premiums from a wide number of people who want to take out insurance against a certain risk. The business offers statistical analysis of the probability of actual loss occurring in a certain number of people with the aid of its actuariums and fixes premiums taking into account certain factors as described above. It operates on the basis that not all insured people will incur loss at the same time and that others will not suffer the loss at all during the contract duration.
Potentially any risk can be assured which can be quantified in terms of money. One should have a life insurance policy to protect loved ones from loss of income due to premature death. You should apply for a Mediclaim Policy to cover yourself and your families from unexpected medical expenses. You should take out a auto insurance policy to protect your car from theft or harm in accidents. You can choose a home insurance to protect your home against theft, damage due to fire, flood and other hazards.
Life assurance, health insurance and motor insurance are the most common types of insurance in India. Besides these there are also other forms which are discussed in the following paragraphs in brief. IRDA (Insurance Regulatory and Growth Authority) controls and supervises the insurance industry.