Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. Nowadays, people insure pretty much anything, but insurance is appropriate when you want to protect against a significant monetary loss. Take life insurance as an example. If you are the primary provider in your home, the loss of your income as a result of your premature death is considered a significant loss and hardship that you should protect family against. It would be very difficult for your family to replace your income, so the monthly premiums paid by you for the insurance policy ensure that if you die, your income will be replaced. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense. Everyone that wants to protect themselves or someone else against financial hardship should consider insurance. This may include:
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1 Comment
1/17/2017 04:21:24 am
Well defined the term Insurance. Yah, I agree with you that insurance plays a vital role in financial hardship. Thanks for posting this information post.
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