Insurance As a Remedy

As many of us might have heard the word "Insurance " so many times.But it will be surprising to know that there are different types of Insurance provided by the Insurance companies. Types of insurance coverages Property Insurance Health and Medical Insurance Causality Insurance Marine insurance Agriculture insurance Motor insurance Aviation Insurance Construction/Erection Insurance Liability Insurance Cyber Risk Insurance Yes, Still there are many insurance coverage's that Insurance companies are offering.As the competition is increasing in the industry, the companies are offering border and diversified coverage to the policy holders. As a customer (Policy holder), He/she should decide the type of coverage and Limit of the coverage as per there requirement.If the customer takes higher limit then required , he will ended paying the higher premium.For Ex: If a Person wants to insure his house against the catastrophic events  and he observed in his tow...

It will be long puzzle for many of us that how insurance companies make money.Insurance companies Underwrite the policies from policyholder and collect small amount called "Premium" as they are transferring the risk from policy holder either it may be house or a property or a liability.This premium is accumulated and re invested in Equity,derivatives ,Bonds, National schemes and a small portion kept  as "Ready to use" reserve.The amount in "Ready to use" reserve is used to pay the claims. The remaining portion of amount is invested in  Equity,derivatives ,Bonds, National schemes . This will give you better returns for the capital that is invested.One more positive aspect for insurance company is that they wont pay immediately as soon as the get the claim. They have 1 month of duration to pay the claim that are raised from the applicant. For some of the claims , the payment can be extended for years. Hard part of Insurance companies is to invest the am...

What if you have encountered a property loss during a Earthquake or Hurricane or a Wildfire or a Car Accident?  It has a great impact to  a person/family when it comes to financially and personally. Insurance can  help to transfer risk which means that when house /Building collapses due to Hurricane or Earthquake, Insurance can provide financial funding to construct new House/Building in place of a old one. But Insurance companies wont provide the assurance for free but they take little amount known as "Premium". Basically Insurance companies works on the principle of "Polling of Risk" Polling of risks: If a Town has 100 houses and it has reported that 1 houses are destroyed each and every year because of Catastrophe Events. The value of each house is 200 thousands.Consider all houses are insured by XYZ company and premium collected is 2100 Rupees. the total amount collected would be 100*2100 (i.e) 2100000. If 2 houses are destroyed even this year and Insura...