What exactly is Insurance and its Features - insuranceie

What exactly is Insurance and its Features

(If you are interested in knowing all the information about what is insurance and why insurance is important for individuals and organizations as well as its use-based types, then the article is for you, because here all the details related to insurance are given and combed through.)

Insurance plays a very important role in the economy of a country. By collecting the small savings of insurance and forming the capital of various individuals or institutions, on the other hand, by paying these savings, life, debt, and property losses are guaranteed. Here the whole thing improves the standard of living of the people, improves the economic condition of the country and the lifestyle of the people of the country.

Insurance increases the individual productivity of people, contributes to various activities in the field of life, thereby increasing the gross national product of the country. The more the national product of another country increases, the more the standard of living of that country will improve. So in an overview, insurance plays an important role in the economy of the country. At this stage, I will know what insurance is, how insurance works, all the details including the types of insurance.

What is insurance?

What is insurance? The Bengali equivalent of the word insurance is BIMA, which refers to life benefits in exchange for money. In short, insurance refers to the transfer of risk and potential loss of life assets in exchange for a fixed amount of money.

In this case, the specific organization bears the partial or full potential risk of the customer in exchange for money from the customer. Insurance works as a part of risk management to avoid any unforeseen losses.

Companies that are bound by an insurance contract promise to indemnify the customer or those who are interested in taking the insurance against all possible losses through the exchange of time and money. On the other hand, they increase their capital by collecting small savings premiums from all insurance companies of various individuals or organizations. Some similarities with banks can be observed, but their activities are different from the activities of banks.

Insurance is a type of contract. This contract is legally binding between the two parties. In the said contract, one party binds the other party by guaranteeing to pay compensation and the other party binds to the contract by guaranteeing to pay a fixed rate at a fixed rate to receive the compensation. There are many types of insurance, one of which is life insurance. Basically the value of life cannot be measured by money so financial security is provided as compensation.

Everything involved in life including human life is risky. Any accident can occur at any time which can lead to loss of very valuable assets. Some can recover from that loss and some cannot. Based on this sector of uncertainty, the financial activity called insurance has been developed where an organization will partially or fully accept the potential future risks of any individual or organization through the payment of a certain rate.

What are the features of insurance?

Any thing is characterized by its characteristics. Similarly, there are some characteristics of insurance through which the matter can be identified as insurance, and it can be understood whether it is insurance at all. Basically, insurance activities are completed with banking activities, so it is important to know the features of insurance even if these two things are known. 

Below are some features of Insurance:

1) Insurance is a form of financial protection against risk.

2) Insurance distributes the risk among the individuals exposed to the risk.

3) Risks affecting human life and property are the main subject of insurance.

4) In exchange for a fixed premium (what is insurance premium is explained in the next step) at a fixed rate, the insurance company assumes the risk of life and property of the customer.

5) If a person suffers any loss and the person is insured in that sector, the insurance company will be obliged to pay the amount which the affected person will get as compensation.

6) Prerequisite for receiving compensation is whether the condition imposed by the insurance company to teach the sector where the loss has occurred is fulfilled or not. If so, any insurance company will cover the said compensation.