People, Businesses, companies are facing risk in their life or operation for example financial risk for businesses and companies and handicaps, poor health, family security risk, etc. Insurance is a way of minimizing these risks. It is easy to process for everyone. Today, we are discussing the most important aspect in our life that one is ‘What is Insurance and describe the types of Insurance’.
What is Insurance meaning?
Insurance is a process of transforming future risks to others and minimize them. People can’t predicate to their future, there will anything happen in their life. For example: Let’s suppose there is a happy family with five members. There are wife, husband and other their three children. The husband is doing work and earns money to cover the expenses of the family. If the husband may be a handicap or unable to doing work in future may be death because anybody can’t predict their future. If this situation came into their family, this family unable to fulfill their financial needed. At that situation occurs insurance policies help to overcome financial risks. They can easily use this fund for their daily expenses and children’s educational expenses.
How did it work?
There are various types of insurance schemes operated by the insurance company in the market which we are going to discuss in the below sections. First of all, find out which insurance policies are suitable for you then, secondly choose the time period like five years, 10 years, 20 years or others which is preferable for you. You will pay up to maturity date your installment or premium which occurs monthly, quarterly, semi-annually, annually or whatever. If there will happening assigned occurrence and your trustee will not pay other upcoming installment or premium. After verifying by insurance companies your trustee will get full insurance amount.
Types of Insurance
There are many types of insurance schemes operating by many insurance companies. The objective, maturity period all are different from each other insurance schemes. The following are broadly describing the types of insurance. They all policies may be operated by one or different companies. Some of the important and popular are mentioned below:
1. Life Insurance
Insurance companies or policies are collected the premium form insured person for a specified period that maybe 5 years, 10 years, 20 years. An insured person regularly pay a premium up to maturity period, then he gets his full insurance amount. If an insured person will die before the maturity period, his/her trustee gets a full insurance amount and there isn’t an obligation to pay a premium for the family if the insured person dies before maturity. It is beneficial for dependent members of the family to spend expenses.
2. Health Insurance
is wealth. The future is unpredictable. It is a way of securing health expenses occurring in the future. It is a similarity for the payment way from life insurance. If in future the health is going to bad of an insured person, then all medical expenses are paid by the health insurance company.
Example, the government of Nepal is operating a family health scheme in all over Nepal. The annual insurance amount is Rs.2500 covering 50000 medical expenses for one member form up to five members a family. It is a really amazing insurance scheme for all rural Nepalese people and also heath to the poor persons who are unable to cover their medical costs.
3. Liability Insurance
is a third party insurance scheme that means pay the insurance premium for the third person. I think the easiest example is vehicle insurance. In the future, if the vehicle confrontation with people for any reason, for he/her compensation (treatment or death) will pay by the insurance company. It is totally insured for another person’s behalf. Most of the case these types of insurance maturity period is a year.
5. Casualty and Property Insurance
This is another insurance policy to protect against losses. This is usually protecting the insured person from fire, theft, accident, etc casual occurrence or event. The way of paying premium is almost the same as other insurance policies.
At last, Insurance is a way of minimizing future risks by replays monetary terms. I suggest all individuals, businessmen, companies, various projects, and others have to ensure their works, health, property or other things for minimizing future losses to covered in a monetary way.