For the insurer it must provide a payment of money taken by insurance, such as life insurance (health or death) or insurance (fire, cars, homes, valuables, etc.).
While the definition of insurance in the broadest sense is an agreement between the insured and the insurer, to receive a premium to provide reimbursement to the insured for any loss, damage, or loss of expected profit or loss may be due to a certain event.
Thus, it can be concluded that the insurer is:
1. a treaty
2. There is a requirement in an agreement, which pays a premium
3. Reimbursement will be given to the insured by the insurer
4. It is possible that the events are not sure or do not necessarily happen
While the cost of insurance premiums is the prerequisite in the insurance agreement. Because without the premium will be no insurance.
Insurance permits people (individually), businesses and alternative entities to safeguard themselves against vital potential losses and money hardship at a fairly reasonable rate. we are saying "significant" as a result of if the potential loss is little, then it does not be to pay a premium to safeguard against the loss. After all, you'd not pay a monthly premium to safeguard against a $50 loss as a result of this might not be thought of a money hardship for many.
Insurance is suitable after you wish to safeguard against a major financial loss. Take life assurance as Associate in Nursing example. If you're the first wage earner in your home, the loss of financial gain that you justr family would expertise as a results of our premature death is taken into account a major loss and hardship that you ought to shield them against. it'd be terribly tough for your family to interchange your financial gain, therefore the monthly premiums make sure that if you die, your financial gain are replaced by the insured quantity. a similar principle applies to several alternative varieties of insurance. If the potential loss can have a prejudicial result on the person or entity, insurance is sensible.
Everyone that wishes to safeguard themselves or somebody else against money hardship ought to take into insurance account. this might include:
- Protective family when one's death from loss of financial gain
- Covering contingent liabilities
- Protective against the death of a key worker or person in your business
- Shopping for out a partner or co-shareholder when his or her death
- Protective your business from business interruption and loss of financial gain
- Protective yourself against unpredictable health expenses
- Protective your home against thievery, fire, flood and alternative hazards
- Protective yourself against lawsuits
- Protective yourself within the event of incapacity
- Protective your automobile against thievery or losses incurred thanks to accidents