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Articles » Finance » Insurance >> View Article
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| Do I Need To Have Insurance? |
By:
Carol Bell |
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The purpose of insurance is to prepare for and manage risk in a given event in the form of a premium paid by the person planning against the risk by the broker prepared to cover the risk of the event of it occurring. To have a form of financial recompense should the risk, an sickness or accident for instance happen, is the basis by which the whole world has now accepted and needs insurance. The amount the insured pays, or insurance premium is based on the chance of the event taking place and if it doesn't, the risk taker or insurance firm, keeps the premium paid.
There are also insurance policies that will cover an event but also have an element of investment, whereby the premium is invested by the insurance agent and the amount assured is paid out should the event happen but if it doesn't then at the end of the agreement any profits, after the broker has taken out their fees, are paid to the client. Insurance is a huge field and there are an untold number of companies now able to supply this service which has also lead to the decrease in insurance premiums for many types of insurance.
Some kinds of insurance are mandatory, while others are optional and a provider or organization may actually refuse a person to carry out an activity if they are not insured. Cover can be used for anything including life insurance, automobile indemnity, health indemnity, home cover, property protection, disability protection, travel insurance, pet protection, cycle insurance, recreational vehicle protection, sports cover and so on.
Specialist insurance may only cover one very specific event like a ski ing accident or even abduction for example, which just shows how broad the field of insurance is. So insurance can be for anything you want although the price may not be something you will agree with.
This arrangement between the insured and the underwriter is called an insurance policy and normally comes complete with a list of prerequisites called a schedule. This is a legally binding arrangement in which the insured agrees to pay a certain sum as a premium to the underwriter and providing all the terms of the arrangement have been met, the insurer in turn promises to cover any costs that may have to be incurred in the future for the particular person or object that has been covered by the policy.
A quotation for the insurance provider will indicate the main points of what the insurance is for which the insured must agree with and be prepared to pay the premium for on a regular basis. Once the document is signed, the insurance company will review the application before it too agrees to the contract, however sometimes other elements may need to be clarified before it is finally completed.
The policy stays in force for a set period of time or if the event insured against happens then the insurance company can be approached to honor their side of the arrangement with a pay out of the compensation agreed. Although some individuals ring the insurance company directly, others will use a broker who will try to find a similar policy for less money.
With every insurance policy there are four main points that the insured are concerned about, will the policy cover everything requested and to what boundaries, will there be any cost that are not straightaway apparent and will they cause problems if it comes to paying out on the policy. You can contact an insurance broker for getting the right insurance policy but the internet is also a very good source for getting quotes, comparing various policies and deciding on the best one. With the advent of the internet it is just as easy to source your insurance policy online and comparison websites can be as useful as a broker locating a policy at the price that suits your budget. |
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