Insurance

What is Risk?

Risk is the factor which is present in everyone life and in every work. Basically risk is uncertainty of something i.e. we can’t say with 100% surety that whether this thing is going to happen or not and if occur then at what time it will occur. Risk is a situation where we expose to danger, harm or loss. They are various risks, like risk of life (we know that it will certainly occur but we don’t know the time of its occurrence), like risk of decision of any business/situation/ or anything else (we don’t know that whether the decision we are taking is going to give us the desired result or not but we may know the time of the results to be declared) and risk of theft/damage of vehicle, etc.

What is Insurance?

The term ‘Insurance’ is being used to cover the risk of financial loss occurred in the life of human due to certain activity occurred. Activities like loss of life/disability/critical illness of earning member of the family (loss of monthly household income), any diseases to the family member which need to be operated or hospitalized (loss of expenses occurred in medical emergencies), any car/bike/vehicle accident occurred (loss of expenses to recover the vehicle damage or loss of life occurred due to accident with vehicle), any theft occurred in house/factory/shop/ office, any fire occurred in house/factory/shop/office, any mobile damage or mobile theft, any loss or problem occurred during the travelling, any loss or problem occurred during the ship transit, any loss of life occurred during the construction work, etc. They are various type of such financial loss activities occurred and to control these losses they are various types of insurance are being formed.

What are the types of Insurance available?

There are various types of insurance available and some of them are as follows:-

• Life Insurance
• Health Insurance
• Car/Bike Vehicle Insurance
• Travel Insurance
• Maritime Insurance
• Liability Insurance
• House Theft Insurance and
• Mobile Insurance, etc.

Why insurance is needed?

We need insurance to get the risk cover from the loss that may or may not occur in the coming future. If occurred then we could be able to recover the financial losses.

Why the insurance companies cover the risk of loss of higher amount than the premium paid?

Insurance companies works on the concept of creating a pool of like risk coverage people, invest the accumulated fund to get the good returns from time-to-time and pay the claimed amount from the pool of the accumulated fund. Any insurance company basically checks and analyse the stats of how much claim may be required to pay off in the near future by the pool of like risk coverage people. Thus this way they are able to know that certain amount of money may be required in coming future and accordingly they decide the premium of the policy. For example, they are collecting money from 100 people and they know that claim is going to be between 10-15 people then the premium collection for the particular policy needs to be around the claimed amount. Thus, this way insurance company cover the risk of loss of higher amount than the premium paid.

What one should consider before buying the insurance policy?

One should consider before buying the insurance policy is to understand the insurance policy thoroughly and studying the terms and conditions of the insurance policy as well as look after the claim ratio settlement of the company.

Why it is that claim ratio is important?

Claim Ratio is a basically a term used for understanding that how many claims have insurance company given to the people who claimed their insurance and the company has paid them off. The claim ratio is very important for the people to look before buying any insurance, as insurance companies create problems at the time of giving the claims.

Why there is a dispute or problems in getting the claims?

Dispute or problems occurred in getting the claims is because of the terms and conditions of the insurance policy which was unseen by the people while buying the insurance policy, Wrong commitment of the sales person during the selling or the problems created by the people to give the claim after getting some amount of money under the table.

What is investment?

Investment is a way where we invest money to get the good returns i.e. accumulation of fund for meeting our future financial goals and expenses.

Why one should go for the investment?

One should go for the investment for making the money out of the money i.e. increasing the funds with their accumulated fund. If they keep the earned money within their house, then that money will be remained same. But if we invest that money then we will be able to increase our money.

Is insurance a good option for investment to get return?

No, actually insurance basically formed for covering the risk of financial loss of various activities. Now-a-days insurance companies have launched various products which give the return and also cover the insurance but they are very expensive and don’t provide you the good returns on your investments which you may be able to get on other investment products.