Insurance-all the basics

What is insurance?

Insurance is a means of providing protection against financial losses in a wide variety of situations. It is a contract in which one party agrees to pay for other financial losses arising from a specified event.
Insurance works on the principal sum of share losses. If you want to be insured against any type of loss, agree to make regular payments, called premiums, the insurance company. In exchange the company gives you a contract for the insurance policy. The company promises to pay a certain amount of money for the type of loss referred to in the rules.

History

The insurance is thousands of years. Code of Hammurabi, a collection of Babylonian laws of 1700BC, is considered the first form of credit insurance. The borrower is not required to repay the loan, if personal misfortune makes it impossible to do so. Insurance as we know it today can be traced to the great fire of London in 1666, which King 13,200 houses. As a result of this accident, Nicholas Barbon opened an Office to insure buildings.

Types of insurance

Insurance usually includes situations involving pure risk — that is, you may experience situations in which only losses. Such situations include fire, floods and accidents. People can buy insurance to cover unusual types of financial losses such as the dancers may also insure their legs against injury. There are mainly three types of insurance policies are sold:

1. life assurance

Life insurance policy provides that the insurance company will pay a specified amount, when the death of a person. This can be paid in a lump sum or in instalments of the beneficiary [people with the name of the policyholder to use the death]. Certain types of life insurance policies also allows the policies to save funds. Such rules have monetary value. The policyholder can borrow money against the cash value or return policy for its cash value.

Annuities

These are savings plans sold by insurance companies to provide a fixed and regular retirement benefits. If the annuitant [owner of the annuity] dies before receiving the guaranteed number of payments, the insurance company must continue the payments to the beneficiary.

Dividends

Some insurance policies restored part of the premiums in the form of dividends. Such rules are referred to as the participating policies. An insurance company pays dividends, if the money collected in premiums earned exceed the sum needed to pay benefits and administrative costs. Dividends may include a share in profits, the company obtained from the investments made with premium funds. Most are paid dividends in life insurance.

2. Private health insurance

Health insurance pays all or part of the costs of hospitalization, surgery, laboratory tests, medicines and other medical care. Rising medical costs, increased the need for appropriate health insurance. You can suffer significant financial difficulties without such coverage, especially in the case of serious illness or accident.

Dental insurance is one of the most growing types of health insurance. It helps to pay for a wide variety of Dental services.

3. Property and insurance

Natural persons and companies buy property and liability insurance to protect their assets against financial loss. Property insurance provides direct compensation if a policyholder possessions are damaged, destroyed or lost as a result of perils. Liability insurance protects individuals and companies against possible financial losses if their actions result in bodily injury to other persons or damage to property owned by others.

The main types of individual coverage are:

o Housing insurance

This provides protection against loss from damage to the user of a home and its contents.

o car insurance

This is the most widely purchased and the most important types of insurance. Legally responsible for all costs arising from accidents that have drivers. This insurance protects a policyholder against financial loss from accidents.

The financial viability of insurance companies

Financial stability and strength of the insurance company is a major consideration for the purchase of an insurance contract. Insurance premium paid currently provides coverage for losses which may arise in the future for many years. For this reason, the viability of the insurance carrier is very important. In recent years a number of insurance companies have become bankrupt, leaving its policyholders without coverage (or coverage only from the Government secured an insurance pool with less attractive payouts for losses).

How to sell insurance

Most insurance companies sell policies through agents. Exclusive agents are employees of the insurance company, which sold only that company policy. Independent firms sell policies for several companies.

David Dugan is the author of the insurance information http://insurance.divinfo.com/site, a site that contains information about housing, auto, life, PET, and many other types of insurance and retirement http://retirement.divinfo.comsite

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