What is Insurance, Type of Insurance and How it Work?
Generate Link What Is Insurance? Insurance refers to a contractual arrangement in which one party, i.e. insurance company or the insurer, agrees to compensate the loss or damage sustained to another party, i.e. the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. It is often represented by an insurance policy, wherein the insured gets financial protection from the insurer against losses due to the occurrence of any event which is not under the control of the insured. Types of Insurance Basically, there are two types of insurance, as presented below : Life Insurance: The insurance that covers the risk of the life of the insured is called Life insurance. In this, the nominee will get the policy amount, upon the death of the insurer. This is also called as an Assurance, as the event, i.e. death of the insured is certain. The payment of the policy amount on the maturity will be made in one shot (lump sum) or periodical ins