How do Insurance companies work? Types of insurances

Insurance companies working procedure

The insurance companies work by collecting funds from it’s clients by selling policies to them and funds those money to cover the damages.

In short, it is a PROMISE OF PROTECTION!

It’s a legal contract between an insurer(company providing insurance) and the insured(the one who avails the benefits), in which the insurer provides a guarantee of the compensation in case of any specified loss in terms of finance, business, property, health etc.

Insurance companies generally work on the basis of their work profile. They are divided into two categories

  • Private insurance companies
  • Government Insurance companies.

An insurance policy is a set of terms that an insurance company offers to it’s client for purchase.

Types of Insurances – Life, Health, Auto, Home, Disability

There are many types of insurances. But we’ll talk more about the most general ones. In each type of insurance, the insurance company provides compensation in the agreed form against any type of financial damage to the insured.

Life Insurance: In this type of insurance, the insurer provides compensation or money to the beneficiary when the insured dies. Life insurance protects you against both the inevitable and the unforeseen. Whether it is a sudden tragedy or the simple reality of death and taxes, coverage helps your family to pay for post-mortem bills, personal support and lost income.

Health Insurance: In this type, the company bears the medical and hospitalization expenses of the insured.  Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.

Automobile Insurance: In this type of insurance, the company bears expenses of any damage caused to the vehicle of the insured.

Home Insurance: This type of insurance covers damages to the insured’s home.

Disability Insurance: This type of insurance pays income to the insured in case the insured becomes disable for some reason to earn income.

Other types of insurances include Educational insurance, Agricultural crop Insurance, Travel Insurance, Disaster Insurance etc.

Why it could prove to be a lifesaving asset against the most severe financial strain or setbacks?

Insurance secures you financially in case of any financial emergency. As the future will always be uncertain and unpredictable. One can’t really know his future but can be prepared appropriately for any kind of future adversary.

It helps in providing support to other family members who are dependent on you. So, insurance can provide assistance to other family members in your presence or absence.

It also helps in securing your crucial assets like home, office, vehicles, factory, land etc.

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Stay blessed!!! ta ta