Insurance benefits, Elements of insurance, insurance, Insurance policy, Types of insurance, Accident insurance, General insurance, Educational insurance, Business insurance, Property insurance, Travel insurance, Life insurance, Vehicle insurance, Health insurance, types of insurance,What is insurance! Learn about the benefits, elements and types

What is insurance? Learn about the benefits, elements and types

You need to understand the importance of insurance, its benefits and types. Because for some people, insurance is still underrated and they are reluctant to join. Although the benefits in the next life are very great.

Moreover, the cost of living is increasing every year. Whether it’s hospital costs, education and so on. However, thanks to the insurance, the burden can be reduced. This is because its function is to actually protect you from any threats that may arise.

Definition of insurance

Insurance is a contract between two parties, namely the policyholder, who pays the premiums, and the insurance company, which provides a full guarantee to the contributors if something happens.

Insurance is a form of contract between the insured and the insurer. The insured person will have to pay premiums to the insurer. The aim is to be compensated for any financial risk that may arise.

The insurer is the insurance company. The insured person is the customer or the owner of the insurance. There are 3 main elements in it, namely policies, premi and insurance claims.

A policy is a document that is an agreement between two parties. The content is in the form of benefits, premium amounts, risks, and so on. Meanwhile, premiums are premiums that customers have to pay over a period of time according to the contract.

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A claim is a formal application to the insurance company in the event of a risk. Coverage of any risk is written in the policy. So, if a disaster is included in your contract, you can rely on your insurance to lighten the burden.

Also Read: General and specific insurance benefits

Insurance benefits

After you understand what insurance is, here are some insurance benefits:

1. Gives a sense of peace and security

Having insurance can give you peace of mind and security in the event of possible adverse threats. Insurance has the advantage of providing protection against the risk of uncertainty and is believed to increase the self-confidence of the individual holder.

2. Investment facility

Insurance can also be used as an investment. By registering as an insured customer, you will get a guaranteed return on investment at the end of the contract. Insurance intended for investments also provides flexibility and flexibility in the selection of the period of protection. Depending on the needs, the insurance client protection period is also selected.

3. Help in financial management

With regular premium payments, it will definitely make someone more prudent and use your money more efficiently. The existence of insurance will help someone reduce unexpected expenses that usually even exceed your daily or monthly expenses.

4. Have a guarantee of the risk of loss

Having insurance protects against large losses in unexpected events. If the customer suffers a loss, be it life, health, property or finances, the insurance will be prepared to suffer the loss.

Elements of insurance

Here are some items of coverage, including:

1. Bonus

A premium is a liability made by the insured person to the insurer (insurance service provider) as a risk transfer service. This premium must be reimbursed by the insured person in order to receive insurance benefits when needed.

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2. Insurance policy

An insurance policy is a legal document that forms the legal basis of the relationship between the insured (customer) and the insurer (service provider / insurance company). The policy is the basis for the payment of compensation for damages or losses suffered by the insured. The policy is contractually agreed and must be in writing.

3. Claim

An insurance claim is the customer’s official request to the insurance company to pay compensation for damage or loss under the terms of the insurance policy. The insurance company will first check the validity of the claim before making the payment.

Also Read: More details on the definition of insurance

Types of insurance

After you understand what insurance is, here are some types of insurance:

1. Accident insurance

It is an insurance that provides compensation in the event of an accident. If life insurance in general only provides benefits in the event of death, accident insurance will provide benefits for invalidity or medical treatment caused by an accident. Accident insurance is typically used by companies to protect their employees. Accident insurance can also be purchased individually.

2. General insurance

This insurance is useful for protection against the risk of loss or loss of profit and legal liability to third parties. This general insurance guarantee is short-term (usually around one year). There are two types of general insurance, namely social insurance and voluntary insurance.

3. Educational insurance

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It is an insurance that provides the insured with education guarantees. A person typically chooses education insurance to prepare for future children’s education costs. Education insurance is different from education savings. Unlike saving, the premium you will pay monthly will take the form of investments such as mutual funds or stocks.

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4. Business insurance

It is an insurance that guarantees a company against a risk that causes losses such as loss, damage and more. Business insurance can provide protection for business owners ranging from small and medium-sized enterprises to large companies to multinationals.

5. Property insurance

Property insurance provides protection against any risk of loss of property such as homes, stores, offices and other valuable assets. Property insurance protects your home or property owner in the event of property damage. The risk is, for example, damage caused by natural disasters, fire or other losses.

Other types of insurance

1. Travel insurance

It is a type of insurance that guarantees protection to policyholders during the trip, e.g. protection of medical expenses, loss of goods in luggage, loss of travel documents and others. Travel insurance is used extensively by travelers to keep them safe.

2. Life insurance

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Life insurance is insurance that provides protection for a person’s life. Life insurance products will provide you with a compensation benefit if anything happens that results in the death of the policy owner. Life insurance benefits will also be awarded when a person is no longer earning a living or is too old.

3. Vehicle insurance

Vehicle insurance is insurance that provides protection for vehicles in the event of hazards such as accidental damage, loss, and more. Vehicle insurance may cover the cost of repairs, loss, or damage.

4. Health insurance

Health insurance is a type of insurance that provides coverage for health problems caused by accidents or illness. The health insurance will cover the health or care costs of the policy holder. With health insurance, your insurer will help cover the usual treatment process and provide you with death benefits.