Insurance in general refers ta an agreement where an amount is paid to the loss bearer by the insurance company, on the maturity period. The amount will only be paid if the loss occurred as per mentioned in the agreement. If the loss occurred and the incident have nothing to do with agreement then the company will pay nothing.
The term ‘Policy holder’ refers to the one who insured his life or good from the insurance company and the term ‘Insurer’ refers to the company who will pay to their policy holder as per agreement.
Having a life insurance is important as in our day-to-day life we come across things which we did not expect to happen such as accident or death, etc. in these kind of cases as per agreement if any accident happens then an amount will be exempted and it will help you to meet the requirement of the hospital in financial form.
If the person dies then then life insurance company will pay an amount to the policy holder’s family as we can understand that money cannot be replaced with the person but money can help you to meet the daily expenses such as groceries, school fees etc., till the time the family members get a new source of income.
When a valuable good is secured then if any accident took place such as theft, fire etc., the amount which you faced as loss it can be recovered by insurance company if it is mentioned in the agreement. The total loss may not recover but it will help you to meet the level requirement for new valuable goods.
Having insurance for life or valuable good is important now-a-days as we cannot expect everything will go smooth, for the worst-case scenario insurances helps a lot.