INSURANCE POLICY: HOW WELL DO YOU KNOW ABOUT IT?

Insurance policy, well this term is heard by every one of us, but not everyone knows about it. During this pandemic, the term is getting more popular as everyone talks about health insurance, its types, and its benefits. This pandemic affects everyone’s life as many people spent all their savings on paying hospital bills.

In our life, any unexpected situation may occur at any time without giving an invitation. And that unexpected situation may disturb our whole future planning and affect our families whole life. So to ensure safety and security the term insurance came into existence.

So to spread awareness and share knowledge, in this blog we discuss insurance, its benefits, types, and its need.

What do you mean by the term Insurance?

Insurance can be defined as a policy or contract, in which the insurer pays for losses that may or may not incur in the future. In simple words, it can be said, Insurance is a policy people buy at some cost from losing money at the time of emergency. It gives financial protection during cold times. It provides reimbursement against the losses that occur.

What is the need for Insurance Policy?

It is a very important part of financial planning. As insurance provides security against any losses that may be incurred in the future. Purchasing an insurance policy ensures, that you are financially safe and secure to face any kind of difficulties that occurs in the future.

What are the benefits of taking insurance policy?

The first and most important benefit of taking insurance is the payment of losses. It provides assistance and financial security when it is most needed. In an emergency, it ensures the insurer they are financially stable, and an insurance company will bear all the losses.

Types of Insurance Policy Available

Insurance is classified into two main categories, general insurance, and life insurance.

These categories are again sub-divided into different categories.

General Insurance: General insurance scheme involves policies for a specific duration of time. Likewise, health insurance, motor insurance, travel insurance, home insurance, and fire insurance. This kind of insurance policy assists if any accident happens.

  1. Life Insurance:

A life insurance scheme involves policies for long-term duration. It includes Term Life Insurance, Unit-Linked Insurance Plans, Whole Life Insurance, Pension Plans, Child Plans, and Endowment Plans.

Is there any disadvantage of taking insurance?

As we know insurance provides financial stability at the time of loss. But in addition, it has some disadvantages too. Let’s discuss some disadvantages of insurance.

  • Terms And Conditions: Every insurance policy has its terms and conditions decided by the company. At the time of taking insurance, the insurer needs to accept those conditions. And the company only bears the loss incurred under those conditions.
  • Fraud Agencies: Many people bear losses due to fraud insurance companies. These companies sell their policies at the lowest rates, many people will it. And then they elope from that place and no one will find them.
  • Expensive: Many insurance policies are quite expensive and it is of no use after its period is over.

Bottom line:

Since due to covid-19 we face lots of things in this pandemic. And it is somehow relief for people who took health insurance. As health insurance covers the expenses of medical facilities. But many people didn’t know about insurance. So we discuss some important points related to an insurance policy that everyone must know about it.