Having a right kind of insurance meaning you have a good financial planning. Many of the
people have a different kind of insurance but only a few people understand the real value of
insurance and why people need to have one. For most of the people, insurance is one kind of
investment and an excellent tax saving avenue. Ask an average person about her/his
investments and they will mention proudly an insurance policy as a part of their core
investments.
What is insurance?
Insurance is a great way to spread out the significant financial risk of a business entity or a
person to a large group of people or business entities in the occurrence of a predefined event
of life. The cost of being insured with a no exam life insurance or other insurance is the
annual or monthly compensation that should be paid to the relevant insurance company. In
the purest form of any insurance, if the predefined incident does not occur within the
specified time period, the money that paid as compensation will not be retrieved. Insurance is
actually spreading the financial risk among the insured people and lighten their financial
burden in any event of shock.
Insured and insurer
When you seek protection against the financial risk and make a contract with a good
insurance company, you become insured and the company becomes the insurer for you.
There are different types of insurances that you can look for like the health insurance, dental
insurance that covers implants, life insurance, car insurance and even complete insurance
plan for your business.
Sum assured
In Life insurance, there is a certain amount of money that the insurer promises to pay if the
insured person dies before predefined time. But no bonus will be added to nonterm insurance.
In the non-term life insurance, this guaranteed amount of money is known as the insurance
cover.
Premiums
For the protection against the financial risk, the insured people need to pay the compensation.
This is known as the premium of insurance. This amount can be paid quarterly, monthly and
annually or as decided by the contract. The total amount of the premiums should be paid
several times but lesser than the insurance cover. Major factors that determine premium are
the cover, a number of years for that the insurance is sought, the age of the insured etc.
Nominee
The beneficiary who is specified especially by the insured to receive the assured amount and
others benefits is the nominee.