In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Since insurance policies are standard forms, they feature boilerplate language which is similar across a wide variety of different types of insurance policies.
In life, unplanned expenses are a bitter truth. Even when you think that you are financially secure, a sudden or unforeseen expenditure can significantly hamper this security. Depending on the extent of the emergency, such instances may also leave you debt-ridden.
While you cannot plan ahead for contingencies arising from such incidents, insurance policies offer a semblance of support to minimize financial liability from unforeseen occurrences.
There is a wide range of insurance policies, each aimed at safeguarding certain aspects of your health or assets. Broadly, there are 8 types of insurance, namely:
- Life Insurance
- Motor insurance
- Health insurance
- Travel insurance
- Property insurance
- Mobile insurance
- Cycle insurance
- Bite-size insurance