What is Insurance:

 Insurance is the method of collecting money in advance from a source with the objective of providing financial compensation for a loss that may occur in the future. Insurance is not an investment plan that can necessarily be expected to return the investment. Insurance, on the other hand, provides protection against existing risks of loss. Insurance is a way to share the losses that an individual may face with others.

Every individual and business face different types of risks. There are many risks to human life such as death and mutilation. There are many types of loss that can happen to property such as fire, medical and natural disasters. Individuals and organizations may suffer huge losses if such losses occur. Insurance is necessary to mitigate losses arising from this type of uncertainty. Insurance is an agreement between two parties. Insurance is a contract between two parties in which the other party agrees to cover the loss of one party on the basis of a certain amount called premium. Insurance cannot eliminate uncertainty in business but it can provide compensation in case of loss. Insurance provides protection against potential losses.

Apart from life and health of humans or animals, insurance is carried out in areas such as electrical appliances, housing, vehicles and agricultural crops. Insurance will be provided by any insurance company. The person who obtains the insurance is known as the policyholder. A certain amount is paid to the said organization for that. This is called insurance premium. Premiums can be paid on a monthly or yearly basis in the policies. The premium is paid for a fixed period in each policy. Life related policies are policies in which you get a fixed amount after maturity. But there is no refund in auto insurance. The policy holder gets financial assistance for the accident and any other damages during the policy term.

Insurances are generally divided into two;

Life insurance:

Individuals are insured in this

Non-Life Insurance:

Any goods or assets are covered by insurance.

What is life insurance?

A man's life is uncertain. It is susceptible to various hazards. May die too early or live long. In case of untimely death, the company pays compensation to the family. Otherwise, the revenue stream will continue to pay as compensation. Hence individuals seek security against such risks and life insurance companies offer that security. Life insurance is started to deal with uncertainties in life. But gradually life insurance coverage expanded and various types of insurance policies came into existence as per the needs of individuals. Examples are health insurance, life insurance, agricultural insurance, and disability insurance. Life insurance is a contract. According to this, the contract is to pay the sum insured on the death of the insured.