What is insurance and its types?

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What Is Insurance and Its Types?

 

Insurance, in general, refers to an arrangement in which the insurance company pays a sum to the loss bearer at the end of the maturity term. The sum will be paid only if the loss happened as specified in the agreement. If the loss occurs and the incidence was unrelated to the agreement, the corporation will pay nothing.

The word ‘Policy holder’ refers to the person who purchased insurance for his or her life or property from an insurance business, while the term ‘Insurer’ refers to the firm that will pay the policy holder as agreed.

 

Types of Insurance

There are two types of insurance, and they are: –

  • Life Insurance

Life insurance is a contract or agreement between insurer and policy holder for life, life of policyholder. As policyholder will get an amount for compensation in case of any accident or loss of life.

 

Life policy consists of different variety of policies related to life, such as term-life insurance, endowment plan, whole life insurance etc., having insured your life saves you from facing financial issues at the time of when you need money. 

 

If your agreement matures after the maturity period of any policy which is designed like same then you can claim the amount.

  • General Insurance

In general insurance, it’s the contact or agreement between the policyholder or the insurer for the valuable good for a particular period of time. When this policy will meet the maturity period and you have faced no loss then the amount will be given. 

 

The amount will only be given if you have faced any loss, during the period, mentioned as per agreement.

 

General insurance will help you to recover the loss of the valuable good if any incident takes place while the maturity period is not over yet