What is Insurance? Understand Insurance
Understand Insurance. What if someday you have a health problems that require immediate treatment at the hospital, and you have no savings to handle it. Imagine you ride your car and crashed into something, but you can’t fix it because you’re running out of money. Then, you are fired from your main job but at the same time you have to immediately pay your children’s school fees.
How you can overcome those problems?
Can you answer the three questions above?
Or, have you had a solution if someday such an event comes to you?
Before you get too dizzy to think about the answer, we have one simple word to help you: insurance. Yes, insurance is a word you often ignore when you see its ads on billboards, social media, television or radio.
But, did you know that one word can be your lifesaver?
Or your child’s brighter future guarantee?
Before a question about insurance comes to mind, we will help you understand what insurance is and why it is so important for your life.
What is insurance? Understand Insurance
Insurance is a form of potential risk management from unexpected things such as loss, death, health problem and so forth. So that, if the incident happens you can get compensation, relief, monetary responsibility in accordance with the type of your insurance. Insurance is a coverage or agreement between two parties. The first party is that they are obliged to pay contributions, while the second is that they are obliged to guarantee fully the dues payer in case something happened to the first party or property in accordance with the agreements made.
Based on the definition
There are many things that can be insured. Some examples are goods and services, human health, legal liability, life, and other interests that can be lost, damaged, lost, or reduced in value. Simply, insurance can mean protection in terms of financial losses, both big and small. The term “insured” refers to anything that gets protection.
Insurance has several functions, namely as a risk transfer, fund collection and a balanced premium. In addition, it can also be useful to push business growth, prevent loss, control loss, have social benefits and as a savings. While the additional function of insurance is as an investment fund and invisible earnings.
Who offers insurance? They are the so-called insurance companies. It is an institution that provides a variety of insurance policies to protect a person or his customers from various risks of loss by paying premiums regularly. Companies work by bringing together the risk of a number of their policyholders. It includes non-bank financial institutions, but the companies still play an important role as one type of financial institution in a country
In fact, the journey of life is not always as smooth as we expected. A risk is a natural thing. Same as some of the events described at the beginning of this article, that we cannot avoid. But you do not need to worry, because insurance can bear the cost you have to spend when the unwanted thing happened. In other words, insurance exists as a solution to reduce or even move the risk that we should bear to other parties.