What is insurance in simple words for interview?

Simply put, insurance is a contract, represented by a policy, in which the policyholder receives financial protection or reimbursement for losses from an insurance company. The company groups customer risks to make payments more affordable for policyholders. Insurance is a type of contract represented by a policy. It is a contract between the policyholder and the insurance provider.

Insurance is a type of protection against financial losses. It is a form of risk management and is primarily used to protect against the risk of an uncertain loss. It's a great way to manage your risks. When a person buys insurance, they get protection against unexpected financial losses.

The insurance company pays them a contractual amount if something bad happens to them. An insured person or entity receives financial protection or reimbursement for losses from an insurance company. If a person does not have any insurance and an accident occurs, they may be responsible for all related costs. So it's always a good idea to have the right insurance.

The term insurance coverage specifies that when a person takes out an insurance policy from an insurer or insurance company, the insurance company will cover the insured things for a specific amount for itself or for the things for which the insurance policy was taken out. It is a type of agreement that consists of some points depending on the premiums paid by the policyholder. The person who takes out an insurance policy must pay premiums to the insurance company. Depending on their insurance coverage, the insurance company must pay the insured in case of damages or claims filed by the insured in accordance with their insurance coverage.

A premium is a price or amount that policyholders have to pay for an insurance contract to the insurance company. It's the price you pay for protection against uncertain loss, danger, or damage. It can be paid monthly, quarterly, or annually depending on your plan, in exchange for the coverage that the insured have contracted from the insurance company. A statement page is an official document or a copy that contains all the information of the policyholder, such as the name, address, vehicle information, type of coverage, and information about the beneficiary of the loss.

It is updated when you make changes during the life of your policy. For example, if you add a new endorsement, your insurance company will update the statement page and send you a revised copy. As the name suggests, the beneficiary of the loss is a person or bank that receives the insurance payment after losing the property or vehicle owned by the insurance policy holder. According to the laws, it is a clause of the insurance policy.

It is used to cover the investment of other parties or banks from which you have obtained the loan against your vehicle or property. For example, if you have a car on loan and you have insurance for that car, if you had an accident and your car is completely damaged beyond repair, your bank still owes money. When you claim insurance, the insurance company will pay the money directly to the bank or to the person you owe money to. In this case, the bank is the beneficiary of the losses.

In insurance, the term annuity specifies a policy issued by the insurance company to promise the policyholder a fixed income for life. It is a fixed amount of money that the policyholder receives each year for the rest of their life. Under this contract between the policyholder and the insurance company, the insurance company must pay you immediately or in the future after a certain period. Travel insurance is one of the most important things you should buy if you're traveling with your family, especially abroad.

It's important when traveling abroad because it covers several risks. For example, medical risks, travel risks, and also flight disruptions. Coinsurance specifies a policy that is usually offered by health insurance companies. In this policy, the insured must share coverage with the insurance policy at a percentage of the value of the policy after paying the deductible or co-pay.

This is generally a division of 80% and 20%, in which the policyholder has to pay 20%, while the insurance company pays 80% of the amount covered. The term “amortization value” specifies the amount that the policyholder will receive from the life insurance company if they decide to leave the policy before it expires. Eventually, it's a loss for policyholders because they don't meet the insurance company's criteria. Other names for the return value are the cash back value or, in the case of annuities, called the return value of the annuity.

If you're an insurance policy holder and it hasn't been long since you bought the policy, you can replace it with another policy if you see better returns. But if you bought that policy a long time ago and you've already paid a lot of premiums, then it's not recommended, as you'll lose all the benefits of the old policy. In addition, the premium will increase as you age. Another problem you'll see in this case is that the two-year contestability period will also start again.

In insurance policies, a free review period is a period or duration in which policyholders can cancel their newly purchased policy without penalties or cancellation fees. This is usually a period of 10 to 15 days, but it depends on the insurance company and may vary. During the free review period, the policyholder can decide whether or not to keep the insurance policy. If policyholders are not satisfied with the benefits or services, they can cancel the contract and receive a full refund.

Therefore, it is possible to get a full refund if the policyholder cancels the insurance policy within the free review period. On the other hand, if the person paid the premium payments for a significant period (2 to 3 years at least) and then fails to pay the premium, the insurance company will deduct the premium from the accumulated amount. This is particularly common with permanent life insurance policies. It continues until the accumulated funds run out, after which the company terminates the policy.

One of the simplest types of life insurance is term insurance, which provides your family with financial security in the form of money for a set period of time. When a policyholder dies within the term of the policy, the insurance company is responsible for paying the death benefit to the candidate or beneficiary. The term of the policy will not be extended if the life guarantee survives it. Therefore, no expiration bonus will be awarded.

Comprehensive life insurance products offer the policyholder a double benefit throughout their life, as they offer protection and investment. The maximum age for these policies is usually 100 years. The benefit of accumulating money all the time is another feature of the complete life plan. Unlike term plans, full life insurance or endowment plans also pay when you live longer.

In this case, the insured is the person or organization that has the policy, and the term Insurer specifies the company that covers the insured and pays the compensation. In the event of a fire or natural calamities, if your home is completely damaged and if you want to claim your personal property from the insurance company, the inventory list is very important. Like all types of insurance, in life insurance, all insured persons pay premiums to a common fund with which all claims are paid. In the event of an accident, the payment will be made under the policy concerning the insured and will be made to the third party and not to the beneficiary of the same.

But there is a deadline that must be met to convert term life insurance into permanent life insurance. Some insurance companies have a limited-premium payment arrangement, whereby you can pay the premium in 3, 5, 7, or 10 years, depending on your income, and you can still have coverage for the life of the policy. So, yes, a beneficiary can apply for the insurance policy if the policyholder has been missing for several years, but some conditions must be met. Usually, the insurance company gives a grace period of 10 to 15 days to the insured if they don't pay the premium before the due date.

General insurance can also be classified into subcategories that are grouped into several types of policies. In this policy, you share coverage with the insurance policy at a percentage of the value of the policy after the deductible. The insurer is the company that provides the insurance policy and the insured is the person who buys the policies from the insurer. .