There are many times when we have to go through bad phases in life, which may involve physical injuries or financial losses. In such times, insurance seems to be our only hope. If we are not insured against uncertain risks, we have to bear the losses involved therein.
In this process, policyholder has to pay a certain fees at prescribed time intervals to the company, and in turn, the insurer agrees to bear the financial losses and expenses of the policyholder. Insurance is most helpful in cases of property loss, in business, loss of life, substantial medical expenses, damage to automobiles in case of accidents, etc.
If you are thinking about its importance in risk management, it protects the business from shutting down in the event of any property loss. The losses can be incurred by any means of destruction, such as fire, floods, storms, and many other natural calamities. Financial losses that may arise due to a major theft can be covered.
In the working of these policies, you keep paying the premium periodically, and in case of death, the insurer has to pay a particular amount to the nominees, who are primarily your family members, and those dependent on your financial support. The amount to be received by the family, in case of death, depends on the policy you choose.
Even if you are covered with a policy that is provided by your employer, it is always better to have your own. The policy of the employer may just include an amount which is twice the annual pay; however, other policies may allow up to ten times the yearly pay.
It plays an important role in covering the prescribed medical expenses. In this, you have to pay the premium, for which the expenses on your medical bills are paid by the respective company.
Remember, expenses will only be covered, if the insured becomes ill due to the causes covered in the policy. As the costs for medical treatments are rising, it is suggested to avail a good healthcare plan.
There are many types of policies, which have a cover for specifics in the accidents. Some types may cover damages caused by vandalism, fire, robbery, and natural disasters. Before deciding on the policy, understand all the aspects that are covered.
Health, life, and car insurances are few types that will help you to be safe against the losses incurred in uncertain events.