Insurance Company

Insurance is a means of providing protection against financial loss in a great variety of situations, for example: fire insurance, it pays all part of the loss if a homeowner’s house is destroyed by fire. So, when the expected misfortune is encountered, the insurance company can help you to get out of the problem.

There are many types and forms of insurance; liability, life insurance, property insurance, health insurance, and so on. People who wish to be insured against particular types of losses agree to make regular payments, called premiums. In return these people receive a contract, called a policy, from the company to the policyholders is known as the benefit or the claim. Insurance works because policyholders are willing to trade a small, certain loss- the premium- for the guarantee that they will be indemnified in case of a larger loss. Although a policyholder may never receive benefits from an insurance company, the premiums have not been wasted. Insurance gives policyholders a feeling of security. The latter know that they will be indemnified if a loss should occur. They can therefore drive a car, own property engage in many activities and operate a business without getting worried about the financial losses that might result. Insurance generally covers only situations involving pure risks; that is, in situation where only losses can occur. Insurance does not cover gambling and other speculative risks in which either losses or gains may result.

LIFE INSURANCE

A life insurance policy provides that the insurance company will pay a certain amount of money when the person insured dies. The amount of money is called the death benefit of the policy. Normally wage earners who buy life insurance that is they die their families will continue to have the income that the wage earners were receiving. The money can be used to pay mortgage funeral expenses and other debts. The money that are received from an insurance company can be...