subject: Insurance : How It Really Works [print this page] Since the dawn of civilization and history, insurance existed among merchants and traders. Today, insurance is an international "thing". Insurance firms all over the world, especially in countries with major industries, the US, Canada, Britain and most western nations, are becoming major demands for clients seeking to be "insured". Some governments use social insurance programs.
Individuals, families, associations, businesses and other organizations are all vulnerable to financial loss. In other words, they can lose valuables including money at any time. Thus for instance, the chief executive of a corporation would purchase insurance as a "backup plan" when the need arises as financial loss can come all of a sudden.
Ultimately, insurance is very advantageous since when tough situations come, the client would not pay as much as the situation may call for, because the insurance provider will be the ones to pay. In this case, the client has this benefit: a small expense makes up for bigger expenses. Ideally through this insurance activities, those who are fortunate to avoid loss provides for those who have suffered loss.
Insurance providers or insurers use mathematics in their operations. With the use of math, they prepare for probable losses using the theory of probability. Experts in this area use what are called "mortality tables" for life insurances. Other data are used for other kinds of risks in order to predict the possible losses. Based upon these calculations, the insurers will make sure the premiums are in hand so that the losses will be paid as these happen.
Insurance policy consists of the terms of agreement between the insurer, the insurance provider, and the insured, that is, the client. The policies can be classified as follows: liability, personal and property. Liability policies apply to losses involving the person or the property of people other than the client. In these cases, the client is legally responsible by contract or tort law.
Personal policies are for the client's person, thus, they involve premature death, financial loss and disability. They may also involve one's family or close business associates-the persons in whom the client has considerable interest. Property policies refer to the possessions of the client or insured. Thus, these policies are concerned with income loss (related to property), repair and replacement of property.
Insurance are here to stay to make thing better; especially the future. It's all within reach with your hands if you embrace the true essence of insurance.
by: Irsan Komarga
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