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What Is Insurance? Essay Sample

What Is Insurance? Pages
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In one form or another, we all own insurance. Whether it’s auto, medical, liability, disability or life, insurance serves as an excellent risk-management and wealth-preservation tool. Having the right kind of insurance is a critical component of any good financial plan. While most of us own insurance, many of us don’t understand what it is or how it works. In this tutorial, we’ll review the basics of insurance and how it works, then take you through the main types of insurance out there. (To read more about insurance, see our Special Insurance Feature.)

Read more: http://www.investopedia.com/university/insurance/#ixzz2IuYCzxRY

Intro To Insurance: What Is Insurance?
Filed Under » Auto Insurance, Casualty Insurance, Health Insurance, Life Insurance, Property Insurance By Cathy Pareto

Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. (For background reading, see The History Of Insurance In America.)

Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say “significant” because if the potential loss is small, then it doesn’t make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most.

Insurance is appropriate when you want to protect against a significant monetary loss. Take life insurance as an example. If you are the primary breadwinner in your home, the loss of income that your family would experience as a result of our premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums ensure that if you die, your income will be replaced by the insured amount. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense. (For more insight, see 15 Insurance Policies You Don’t Need.) Everyone that wants to protect themselves or someone else against financial hardship should consider insurance. This may include: Protecting family after one’s death from loss of income

Ensuring debt repayment after death
Covering contingent liabilities
Protecting against the death of a key employee or person in your business Buying out a partner or co-shareholder after his or her death Protecting your business from business interruption and loss of income Protecting yourself against unforeseeable health expenses

Protecting your home against theft, fire, flood and other hazards Protecting yourself against lawsuits
Protecting yourself in the event of disability
Protecting your car against theft or losses incurred because of accidents And many more

Read more: http://www.investopedia.com/university/insurance/insurance1.asp#ixzz2IuY0HTiS

insurance
Definition
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.

Read more: http://www.investorwords.com/2510/insurance.html#ixzz2JB2wSv4T

By Cathy Pareto

Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. (For background reading, see The History Of Insurance In America.)

Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say “significant” because if the potential loss is small, then it doesn’t make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most.

Insurance is appropriate when you want to protect against a significant monetary loss. Take life insurance as an example. If you are the primary breadwinner in your home, the loss of income that your family would experience as a result of our premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums ensure that if you die, your income will be replaced by the insured amount. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense. (For more insight, see 15 Insurance Policies You Don’t Need.) Everyone that wants to protect themselves or someone else against financial hardship should consider insurance. This may include: Protecting family after one’s death from loss of income

Ensuring debt repayment after death
Covering contingent liabilities
Protecting against the death of a key employee or person in your business Buying out a partner or co-shareholder after his or her death Protecting your business from business interruption and loss of income Protecting yourself against unforeseeable health expenses

Protecting your home against theft, fire, flood and other hazards Protecting yourself against lawsuits
Protecting yourself in the event of disability
Protecting your car against theft or losses incurred because of accidents And many more

Read more: http://www.investopedia.com/university/insurance/insurance1.asp#ixzz2JB5DUe4s

In one form or another, we all own insurance. Whether it’s auto, medical, liability, disability or life, insurance serves as an excellent risk-management and wealth-preservation tool. Having the right kind of insurance is a critical component of any good financial plan. While most of us own insurance, many of us don’t understand what it is or how it works. In this tutorial, we’ll review the basics of insurance and how it works, then take you through the main types of insurance out there. (To read more about insurance, see our Special Insurance Feature.)

Advantages of Life Insurance
Risk Cover – Life today is full of uncertainties; in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event. Planning for life stage needs – Life Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children’s education, their marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite. Traditional life insurance policies i.e. traditional endowment plans, offer in-built guarantees and defined maturity benefits through variety of product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values. Protection against rising health expenses – Life Insurers through riders or stand alone health insurance plans offer the benefits of protection against critical diseases and hospitalization expenses. This benefit has assumed critical importance given the increasing incidence of lifestyle diseases and escalating medical costs.

Builds the habit of thrift – Life Insurance is a long-term contract where as policyholder, you have to pay a fixed amount at a defined periodicity. This builds the habit of long-term savings. Regular savings over a long period ensures that a decent corpus is built to meet financial needs at various life stages. Safe and profitable long-term investment – Life Insurance is a highly regulated sector. IRDA, the regulatory body, through various rules and regulations ensures that the safety of the policyholder’s money is the primary responsibility of all stakeholders. Life Insurance being a long-term savings instrument, also ensures that the life insurers focus on returns over a long-term and do not take risky investment decisions for short term gains. Assured income through annuities – Life Insurance is one of the best instruments for retirement planning. The money saved during the earning life span is utilized to provide a steady source of income during the retired phase of life.

Protection plus savings over a long term – Since traditional policies are viewed both by the distributors as well as the customers as a long term commitment; these policies help the policyholders meet the dual need of protection and long term wealth creation efficiently. Growth through dividends – Traditional policies offer an opportunity to participate in the economic growth without taking the investment risk. The investment income is distributed among the policyholders through annual announcement of dividends/bonus. Facility of loans without affecting the policy benefits – Policyholders have the option of taking loan against the policy. This helps you meet your unplanned life stage needs without adversely affecting the benefits of the policy they have bought. Tax Benefits-Insurance plans provide attractive tax-benefits for both at the time of entry and exit under most of the plans. Mortgage Redemption- Insurance acts as an effective tool to cover mortgages and loans taken by the policyholders so that, in case of any unforeseen event, the burden of repayment does not fall on the bereaved family.

Throughout history, technological innovations have helped humankind improve their standards of living, beginning with the simple invention of bone tools of prehistoric times, continuing on to and beyond modern air conditioners, automobiles, and super computers. Nowadays, when the rapidness of development and research is so impressive, it is easy to think about the advantages of modern technology.

ADVANTAGE:
Modern technology has solved many problems that people face and play an important role in the development of many countries. Modern technologies create many kinds of products – computers, cloning technology, and video games etc.. Technology today has made life better and quicker In our modern society, people can’t see themselves without computers, cell phones, voice mail…etc… As we look at technologies, questions are risen. The Technological progress make our society more convenient and safe. Making impossible things possible are similar features of the change which previous people have experienced by social change, like shifting from a hunting society to an agricultural society and establishing a commercial society due to the invention of new tools. To consider these advantages and change of society, modern technology, which we use today, might be not only a new tool but also the tool, which makes a dramatic change in history. However, the contribution of modern technology to society should not be eliminated and should be distributed evenly.

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