An insurance policy is the financial cover that can be obtained by paying a monthly amount in anticipation of unfortunate events like personal injury, illness, accident and even death. Insurance has gained a lot of importance in the recent years and more and more people are getting aware of the benefits that come piggybacking with an insurance policy. Affordability of insurance policies, which was once a deterring factor, has added to its popularity. There are numerous insurance companies that are offering a range of insurance policies at affordable rates. There are a few insurance policies which have been declared by the government as mandatory while there are others that are optional.
Some of the popular types of insurances include travel insurance, life insurance, medical insurance, disability insurance, property insurance, home insurance, pet insurance, vehicle insurance, horse insurance, sport insurance, event insurance etc. There are also some special insurance schemes like ski insurance, flood insurance, long-term care insurance, funeral insurance etc. So we can see that there are a variety of insurance policies to cover different kinds of risks.
Insurance policies are nothing but legal agreement between the insurance company and a policy holder. Under this agreement the insurer is legally bound to pay the policy holder an assured sum depending on the monthly premium paid by the policy holder. The policy comes into play when the policy holder faces the unfortunate incident for which he or she has been paying the premium to the insurance companies. The policy details contain information about the premium, coverage, limits of liability, benefits, deductibles, term of insurance and policy limits. There are also other terms and conditions that determine the coverage.
The customers need to approach the insurance agents or the company directly to get a quote on the kind of policy they require. The insurance quote contains all the details about the premium and other policy related information. Once the customer agrees with the policy’s terms and conditions and submits an application, it is reviewed by the insurance company. After the completion of the review, if the customer is found eligible then the company insures the customer.
Insurance policy can be purchased directly from the company or through licensed insurance agents. There are a few things that needs to be considered before purchasing the policy as they would have a bearing on the kind of cover a policy holder can get. The customer needs to aska few questions like:
a) What kind of risks is covered by the policy?
b) What is the policy limit?
c) Are there any hidden costs?
d) What’s the reputation of the company in terms of claim settlements?
Once all these questions are answered satisfactorily then only a customer should go ahead with the purchase of an insurance policy.