There comes a time in life when everything is arranged in the right way, when everything is in the right place and, naturally, you want it to stay that way. One way to ensure everything you have achieved and created so far is insurance policies. This is your ticket to a peaceful sleep. This topic has many questions, so let’s answer them in a short term.
What are you getting into?
The insurance policy is a contract between the insurer and the insured. By the contract, it is determined the claims in which the insurer is legally required to pay for a loss. Loss can be caused by perils covered under the policy language. From the other side, it is determined initial payment, known as the premium, which one insured has to pay.
What is it for?
The insurance contracts are very specific. Those are created to meet particular needs and conditions, proposed by both sides. They also have many features that other kinds of contracts do not have. There is, whatsoever, some sort of a standard form for this type of contract. Later on, when both sides come to an agreement on what the insured wants, this form comes to alteration to meet specific needs. There are also some standard insurance policies with their own specific term and conditions. In most cases, the insurer will want to offer you that standard, to close deals faster, and by better terms for an insurance company. It is always better to try to make your own deal, but it takes some knowledge and time.
The meaning of insurance policies
Insurance policies are subject to the fortuity principle which means that the event must be uncertain. This means that uncertainty can be either as to when the event will happen or as to if it will happen at all. E.g. if there will happen a car accident to the insured not caused by him, and in that case insurance will pay for damage caused and health care.
Some important parts of an insurance contract are:
- Declarations– Declaration identifies who is insured and the company which is insuring.
- Definitions– Definitions define important terms used in the contract.
- Insuring agreement– Insuring agreement defines important terms used in the rest of the policy. Insuring agreement describes risks assumed, nature of coverage, and perils. This is the part in which they will tell you what needs to happen in order to get the policy activated.
- Exclusions– Exclusions are terms that exclude some conditions from the agreement (e.g. If you have some history of heart illness, it will exclude coverage on heart attack).
- Conditions– Conditions are specific rules of conduct, duties, and obligations that the insured must comply with in order for coverage. The condition must remain in compliance in order to keep coverage in effect.
- Policy form – Depending on your needs, insurance companies have many policy forms.
Why do you need insurance policies?
Driving and having a car in countries is required to have insurance, and there are car accidents which can be very expensive if you dint have insurance.
To most people, their home is the greatest asset. It is wise to ensure the home, this is wary times
Depending on the place you live health insurance may be the most important type of insurance to have.
Disability insurance is one of the good plans for the “Just in case” scenario. We all value our health, but in some cases, bad things happen and our health is no longer that great…
Life insurance is one of the ways to plan a financial plan for your family. In case of death, it can cover a lot of expenses and can cover some debt if you had it. Also, the premium can be big to cover your children’s college education.
When you consider taking insurance policies, inform about all options. Gather the pieces of information and carefully determine the conditions under which you are signing the insurance. This could be a big step ahead in your life.