INSURANCE POLICY
Money helps an individual to be in control through out life. Insurance helps an individual to manage and be in control with financial status. An insurance policy is a legal contract between the insurance company [the insurer].  Reading your policy helps you verify that the policy meets your needs and that you understand he required fundamental steps to take into considerations and the insurance company’s responsibilities if a loss occurs. Many insureds purchase a policy without understanding what is covered, the exclusions that take away coverage, and the conditions that must be met in order for coverage to apply when a loss occurs. Reading and understanding your entire policy can help you avoid problems and disagreements with your insurance company in the event of a loss. Make a research about the necessary insurance policy, if necessary consult a lawyer to give a well descriptive explanation about the policy issued to the individual to avoid stories and losses that may occur in the nearest future.
How does an Insurance Policy Work?
To understand how insurance works, you should know below terms:
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Premium:
is the money you pay to the insurance company to avail of insurance policy benefits.
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Sum Insured:
Sum insured is applicable for a non-life insurance policy like home and health insurance. It refers to the maximum cap on the costs you are covered for in a year against any unfortunate event.
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Sum Assured:
Sum assured is the amount the life insurance company pays to the nominee if the insured event happens [death of insured]
          TYPES OF INSURANCE
We begin with an overview of the types of insurance, from both a consumer and a business perspective. Then we examine in greater detail the three most important types of insurance: property, liability, and life.
Life Insurance
Life insurance provides for your family or some other named beneficiaries on your death. Life insurance is about financial security to the people to be able to achieve financial dreams and obligations. Two general types are available: term insurance provides coverage only during the term of the policy and pays off only on the insured’s death; whole-life insurance provides savings as well as insurance and can let the insured collect before death.
Health Insurance
Health insurance covers the cost of hospitalization, visits to the doctor’s office, and prescription medicines. The most useful policies, provided by many employers, are those that cover 100 percent of the costs of being hospitalized and 80 percent of the charges for medicine and a doctor’s services. Usually, the policy will contain a deductible amount; the insurer will not make payments until after the deductible amount has been reached. Twenty years ago, the deductible might have been the first $100 or $250 of charges; today, it is often much higher.
Disability Insurance
A disability policy pays a certain percentage of an employee’s wages (or a fixed sum) weekly or monthly if the employee becomes unable to work through illness or an accident. Premiums are lower for policies with longer waiting periods before payments must be made: a policy that begins to pay a disabled worker within thirty days might cost twice as much as one that defers payment for six months.
Homeowner’s Insurance
A homeowner’s policy provides insurance for damages or losses due to fire, theft, and other named perils. No policy routinely covers all perils. The homeowner must assess his needs by looking to the likely risks in his area—earthquake, hailstorm, flooding, and so on. Homeowner’s policies provide for reduced coverage if the property is not insured for at least 80 percent of its replacement costs. In inflationary times, this requirement means that the owner must adjust the policy limits upward each year or purchase a rider that automatically adjusts for inflation. Where property values have dropped substantially, the owner of a home (or a commercial building) might find savings in lowering the policy’s insured amount.
Automobile Insurance
Automobile insurance is perhaps the most commonly held type of insurance. Automobile policies are required in at least minimum amounts in all states. The typical automobile policy covers liability for bodily injury and property damage, medical payments, damage to or loss of the car itself, and attorneys’ fees in case of a lawsuit.
Other Liability Insurance
In this litigious society, a person can be sued for just about anything: a slip on the walk, a harsh and untrue word spoken in anger, an accident on the ball field. A personal liability policy covers many types of these risks and can give coverage in excess of that provided by homeowner’s and automobile insurance. Such umbrella coverage is usually fairly inexpensive, perhaps $250 a year for $1 million in liability.
Want to Review Your Policy?Â
To obtain a copy of your insurance policy, please contact your insurance agent or company.