What is insurance?
Insurance allows individuals, businesses and other entities to protect themselves against potential significant losses and financial difficulties at a fairly affordable rate. We say "significant" because if the potential loss is small, it makes no sense to pay a premium to protect against losses.
as an example of significant financial loss If you are the main breadwinner in your home, the loss of your family's income will result from life, education and other difficulties that may be related to them. It will be very difficult for your family to change your income, so the monthly premium ensures that if you die, your income will be replaced by the sum insured. The same principle applies to many other forms of insurance. If the potential loss will have an adverse effect.
Benefits of insurance and basic insurance purposes
Everyone who wants to protect themselves or others against financial difficulties should consider insurance. This may include:
Protect the family after the death of a person from loss of income
Ensuring debt repayment after death
Includes contingent liabilities
Protects against the death of key employees or people in your business
Protect your business from business interruptions and loss of revenue
Protect yourself against unexpected health costs
Protect your home against theft, fire, flood and other hazards
Protect yourself against lawsuits
Protect yourself in terms of disability
Protects your car against theft or loss caused by accident.
In addition there are many more reasons someone must have insurance. a large group of people who want to insure against certain losses pay their premiums to insurance companies Because the number of people insured is so large, insurance companies can use statistical analysis to project what their actual losses will be in a particular class.
They know that not all individuals who are insured will suffer losses at the same time or at all. This allows the insurer to operate profitably and at the same time pay claims that may arise. For example, most people have car insurance but few actually get into an accident. You pay for possible losses and for the protection you will be paid for the loss in the event of any.
Risk
- Life is full of risks - some can be prevented or at least can be minimized, some can be avoided and some totally unexpected. What is important to know about risks when thinking about insurance is the type of risk, the risk effect, the cost of risk and what you can do to reduce the risk. Let's take an example of driving a car.
- Types of risk: Body injury, total vehicle loss, should fix your car
The effect: Spending time in the hospital, having to rent a car and have to make car payments for cars that no longer exist
- Cost: Can range from small to very large
Types of insurance
Various types of insurance are provided by various companies engaged in insurance. such as health insurance, loss insurance, loss, education insurance, life insurance and other insurance models. read more on this link for a complete discussion of the different types of insurance and benefits and how the insurance system works and how to choose the right insurance to suit your needs