Insurance is the best option for securing your financial budget and savings in adverse conditions. Or we can say that it is a scheme of securing a particular person or any product in adverse conditions by paying a small amount to the company.
Before insurance, you have to understand the following points to clarify your intention of doing from all aspects.
- Insurance definition by authors
- Comparison of Best plans.
- Limitations of Plan
1) Insurance meaning:
Its meaning is to be insuring about your properties backup. I also have done mine and I will recommend you that please take a life policy.
it is a financial protection security support agreement between a company and individual or entity receives, if you have any financial losses the company takes a small amount of money and ensures you protect in financial disasters.
2) Importance of insurance:
It is an important factor in life you are purchasing your protection of things related to you just by paying some small amount of monthly installment called premiums. In short, it acts as a safety guard.
I am giving an example of myself that my bike is 2 months old, I lost my bike the company pays me the real value of the bike and like that, I recover my money I learn the importance, which I am sharing you:
- Due to this, the daily life of buying and sales are not going to stop due to loss.
- If you take a loan from anyone you must have a Money return plan and securities of that.
- Did you know Security deposit is compulsory in some states
- If you are secure of your thing you are relaxed all the time.
- Due to this security, stability takes place in your family and business.
3) Insurance definition by authors
Prof. D.S. Hansell:
“A social device providing financial compensation for the effects of misfortune, the payments being made from the accumulated contributions of all parties participating in the scheme”.
Dr. W.A. Dinsdale:
“Insurance is a device for the transfer of risks of
individual entities to an insurer, who agrees, for a consideration (called the premium), to assume to a specified extent loss suffered by the insured”.
Prof. John H. Magee:
“Insurance is a plan by which a large number of people
associate themselves and transfer, to the shoulders of all, risks that attach to
“Insurance meaning is a social device for making accumulations to meet
uncertain losses of capital which is carried out through the transfer of risks of many individuals to one person or to a group of persons”.
“Insurance is a contract by which the one party, in
consideration of a price paid to him adequate to the risk becomes security to the other that he shall not suffer loss, damage, or prejudice by the happening of the perils specified to certain things which may be exposed to them”.
Prof. Allan L. Mayerson:
“Insurance is a device for the transfer to an insurer
of certain risks of economic loss that would otherwise be borne by the insured”.
Professor Robert Mehr:
“Insurance meaning is a special device for reducing risk by
combining a sufficient number of exposure units to make their individual losses
collectively predictable. The predictable loss is then shared proportionately by all those in the combination”.
“Insurance is a method of spreading over large numbers of
persons a possible financial loss too serious to be conveniently borne by an “individual”.
Riegel R and Miller J.S.:
“Insurance meaning is a social device whereby uncertain
risks of individuals may be combined in a group and thus made more certain; small periodic contributions by the individuals providing a fund out of which those who suffer losses may be reimbursed”.
E.R. Hardy Iwamy:
“Insurance is a contract whereby one person, called the
“insurer” undertakes, in return for the agreed consideration, called the premium, to pay to another person called the assured a sum of money or its equivalent, on the happening of a specified event”.
Dictionary of Business and Finance:
“A form of contract or agreement under
Introduction one party agrees in return for a consideration to pay an agreed amount of money to another party to make good for a loss, damage, or injury to something of value in which the insured has a pecuniary interest as a result of some uncertain event”.
Dictionary of Commerce:
“The payment of a sum of money by one person to
another on the understanding that in specified circumstances the second person will make good any loss suffered by the first”.
Advanced Learner’s Dictionary:
“Undertaking by a company, society or the
State, to provide a safeguard against loss, provision against sickness, death, etc., in return for regular payments”.
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4) How many types of insurance?
Normally after reading above you have question in mind so I am here to clear your all doubts; I listed some categories:
- Life or Personal
This category make you understand insurance meaning in detail:
1) Life Insurance:-
Life is very important and recommended in this person gives some amount of money to the company with policies that on the death of a person get financial support according to the policy scheme.
2) General Insurance:-
Property insured your property from damage, theft, fire, or any other nature or some natural activities.
Marine is not for everyone it ensures you that is your ship or any marine vehicle, collide with rock or get fire, stolen in this case the policy of insuring you they are taking a risk of your property.
The losses occurring due to fire are insured by any company that comes under fire. This is helpful for industries where the work of fire takes place or in a normal company where the chance of fire is very high.
Liabilities are the things which do not make any income for you and day by day their value of money decreases. For example car, bike, T.V., mobile phone, etc. liability covers automobile, machine, etc.
Social a not for common persons this protection is provided mainly to poor society and the people who are not able to pay money normally in any accident case.
Personal means self if you have faced any disaster injury, accident, Death, or any other worst condition in which your body gets financial loss then that type of is known as personal
In property, all of your properties can be considered. Even your farm crops, your crops get fire, or any disaster then the company will pay off.
it insure a guarantee in a case of loyalty cheating.
- Other Forms of Insurance
Besides the property and liability, there are others that are included in general.
- Miscellaneous Insurance
The property, goods, machine, Furniture, automobiles, valuable articles, etc. It can be considered under Miscellaneous insurance.
5) Comparison of Best insurance plans.
As you are confused now the little bit that, I understand insurance meaning but which insurance would I take so here is your answer,
My financial needs can be different from your financial need and every person wants different things in life I mean say financial needs may be different but some common are:
- We want protection that is our need.
- We have to think about our children’s upbringing.
- In the long term, you have to buy some luxurious cars or any world tour.
- After all your wishes are completed there is a need to think about retirement.
So, first, you have to decide what you want in a plan? What is your needs or area of expanding? By this activity, we also clarify your goal and the seller also sell you are best and accurate here is the biggest problem that most of the people are don’t know there need and goals in life.
Suppose you are going to a doctor and the doctor is analyzing you buy asking different areas of questions. To give you proper precaution and medicine. Same with your Money plan you have to first clear your financial plan so you buy the right plan.
And this is a very important analysis you must have to go through this process with your seller. To decide which policy is better for you this process is changing with your needs and needs changes with time.
Also read- Debt meaning
6) Limitations of Insurance Plan
Before taking the decision of buying a plan everything has its merit and demerit like coins have two faces.
So, after understanding insurance meaning understand the LIMITATIONS OF INSURANCE which helps you to decide your best plan:
- No guarantee of receiving the same amount or equal amount as you pay at the time of premiums/installments.
- You are paying for protection that you may not need.
- According to the research and past data, there are lots of people who do not claim.
- And this is how companies are in profit.
Also read- Mortage
7) Benefits of life insurance
- In case of death, the family gets the sum assured.
- In case of survival, all deposited amounts come back along with interest.
- You get the tax rebate under section 80 C and all proceeds are tax-free.
- This is a unique system of saving which offers peace of mind.
Now it’s up to you to just go and analyze the process of insurance and take advantage and safety of you and your family, properties, assets, retirement. Everything is on your hand. You have to decide your future but insurance is a great option to reduce risk.
Ans: 4 Main insurance are:
1) life insurance.
2) Health Insurance.
3) Disability Insurance.
4) Auto Insurance.
Ans: Insurance is an alternative solution to risk management. it is a protection from financial loss.
Ans: You can only claim your insurance up to its validity.
Ans: yes it can save your lots of money.
Ans: You can contact the insurance company directly and consult with them.
Ans: You have to do your Life insurance must.