Insurance is a contract between an insurance company and a policyholder that protects against financial losses. In exchange for a regular payment called a premium, the insurance company pays the policyholder for covered losses.
How does insurance work?
- The policyholder pays a premium to the insurance company.
- The insurance company agrees to pay the policyholder for covered losses.
- The policyholder receives financial protection in the event of a covered loss.
What are the different types of insurance?
- Health insurance: Covers medical expenses like hospital stays, injuries, and routine visits
- Life insurance: Pays a beneficiary when the policyholder dies
- Auto insurance: Covers property damage, collisions, and other incidents
- Homeowners insurance: Covers damage to your home from accidents, natural disasters, and other risks
- Disability insurance: Provides income payments to people who can't work due to illness, injury, or accident
Tips for insurance
- Read your policy to understand what's covered, exclusions, and conditions.
- Consider your age, health, lifestyle, and the type of insurance when calculating your premium.
