Insurance
Insurance
Insurance has become the basic need of today’s times and we at Jayesh Commercial completely acknowledge that. We have been a consistent player in providing Insurance Services since the past 15 years and our Director Mr. Manoj Kumar Choradia have been the MDRT since the past 5 Consecutive years. We at Jayesh Commercial understand the needs, requirements and the situation of the client and recommend only those Insurance plans which will be beneficial for the client’s future and the future of his family.
What is Insurance?
Insurance enables those who suffer a loss or accident to be compensated for the effects of their misfortune. The payments come from a pool of money contributed by all the holders of individual insurance policies. In other words, individual risks are pooled and shared, with each policyholder making a contribution to the common fund.
The contribution is known as the premium. Premiums are paid to insurers – these are institutions which accumulate the money into the fund from which claims are paid. The loss is in fact paid for the policyholder making the claim and by all the other policyholders who have not suffered in the same way.
Insurers are professional risk takers. They know the probability of different types of risk happening. They can calculate the premiums needed to create a fund large enough to cover likely loss payments. Clearly, only a proportion of policyholders will require compensation from the fund at any one time.
So two important factors arise when calculating the premium. Firstly, the general likelihood that a loss will occur. Secondly, whether the particular policyholder is above or below average in risk.
Take three examples. In motor insurance a young person with a high powered car, or a driver with a long history of accidents will pay a higher premium than a mature and experienced driver with a modest saloon who has been accident free.
Similarly, the owner of a fish and chip shop will pay a higher premium for his fire insurance than, say, the owner of an office. The risk is greater, so the premium is higher.
Someone who is young, fit and in a risk-free job will find it easier to buy life insurance, and will pay lower premiums than someone who has a heart condition or is in a risky occupation.
Kinds of Insurance
In life, unplanned expenses are a bitter truth. Even when you think that you are financially secure, a sudden or unforeseen expenditure can significantly hamper this security. Depending on the extent of the emergency, such instances may also leave you debt-ridden.
While you cannot plan ahead for contingencies arising from such incidents, insurance policies offer a semblance of support to minimise financial liability from unforeseen occurrences.
Broadly, there are 3 types of insurance:
Life insurance is a financial backup for one’s family and loved ones in case of death of the insured. It is a cover which allows your family to maintain a standard of living they are currently maintaining and meet their financial obligations. It also serves as an effective tax saving and risk coverage tool.
It is a contract between the Insurer & the Insured wherein the former agrees to pay to the latter hospitalization expenses to the extent of an agreed sum assured in the event of any medical treatment out of an illness or an injury. In the nutshell the Health Insurance is a policy which covers you & your family against medical expenses due to sickness, accident etc. The Insured in return has to pay a regular premium to the insurer.
General Insurance or Non-life Insurance policies is a practical option for every person who would like to live a risk-free life. Risk is associated with everything and so, it is important to secure all the things that we own and that security is provided by insurance. General insurance covers insurance policies fire, marine, motor, accident and other miscellaneous non-life insurance.
Simply knowing the various insurance policies does not help. Instead, you must know how each of these plans work.
Without adequate knowledge about each of them, you may not be able to protect your finances, as well as the financial well-being of your family members.
Insurable Interest
Insurable interest is a fundamental principle of insurance. It means that the person willing to take out insurance must be legally entitled to insure the article, or the event, or the life. In other words, the happening of the event insured against, or the death of the life insured must cause the policyholder or his family a financial loss. Mr X would not be able to insure Mr Y’s house because its destruction would not cause Mr Smith a financial loss. Similarly, you cannot insure the lives of other people unless you have a financial interest in the life being insured. The principle of insurable interest demonstrates the difference between insurance and a wager or bet.