What is an insurance? The risks involved in our life are multifarious. The sudden demise of a person is unbearable and irreparable one of all risks. That too, untimely death leaves the shock and void in a family. To protect against such unfortunate events and risks, a mechanism called insurance is in place.
Types of Insurance: Basically, two types of insurance exist as Life and non-Life insurance. The First type is for compensating the dependents upon the death of the policy holder. It has two varieties as 1) Pure insurance or term insurance where premium rate will be lower, but no returns or refunds made if the person survives after the policy period. 2) Endowment type, where death and maturity benefits are combined, comes at a higher premium. Non-life products cover the risks like Accident, Marine, Health, Goods, Agricultural crops, Cash-in-transit, etc. Additionally, a third type exists as Reinsurance, which insures risks like Satellite, Spacecraft, etc.…involving huge amounts.
Do’s & Don’t s for Insurance. 1) Read the contract notes when received after committing to an insurance cover. Possibilities are there, that even after taking all precautions before buying the insurance product, some exclusions are made to the risks covered. 2) Keep the policy in force by paying the premium regularly. Your claim will be rejected if you have not paid the premium. 3) Inform the insurance company about any changes in your address, in the nature and composition of assets covered, etc... These issues crop up in the case of business assets and movable assets like vehicles. When you acquire a second-hand asset, the risk is more: you have to make sure the title is transferred into your name. 4) Always source the insurance products from the reputed companies which have a good name in the market. New insurers tend to incline towards more business and profit, not the payment of the claims under their policies.
So, Insurance is a not a liability, but an investment for the future. Insurance agent alone provides solace and relief and in fact brings good news, when others simply console when a family bereaved.