What is insurance and It’s Benefits ?

What is insurance Insurance is a risk transfer mechanism?

Insurance is a risk transfer mechanism that transfers experts in the name of insurance companies responsible for losses incurred by spreading it to a large number of people or firms. Insurance can help you cover the cost of unexpected events such as theft, illness or damage to property. If you buy insurance for any of your assets, the insurance company will pay you the same amount of the lost asset. You can also buy life insurance to protect your loved ones on your death.What is insurance and It’s Benefits ?

Why should I buy insurance?

Insurance can save you from financial loss if the unexpected happens..When you buy insurance, you transfer the cost of potential loss to the insurance company in exchange for a fee known as a premium. Insurance companies invest funds securely, so they can thrive, and be used to pay claims as they arise. The decision to get insurance will depend on your circumstances and your stage in life. Examples of insurance protection include:

Automobile insurance:

If you have an accident or you’re covered by the insured, if your car gets stolen, it will cover the cost of your car repairs. It will also protect third parties from damage.
Life insurance: It will pay for your family at your death.
Property insurance: This will cost your property in the event of fire or damage to repair your property as described by the policy. Insurance can be obtained for both residential and commercial properties.

Types of Insurance

Insurance can be widely classified as traditional insurance and takaful, also known as Islamic insurance. Traditional and Takaful both offer the same insurance types and products. Some of the most common types of insurance policies offered include:What is insurance and It’s Benefits ?
Motor Insurance

There are two basic types of motor/auto insurance coverage

3rd Party Liability: A third party coverage policy holder protects from third party liabilities in the event of an accident such as damage to property, bodily injury or death. In Pakistan, purchase of third party insurance is compulsory for all vehicle owners.
Comprehensive: This is the broadest form of coverage. You are protected from financial losses arising from accidental vehicle, theft and third party liability claims due to accident.
Premium rates depend on several factors including:

Make year and model of car

Purpose of vehicle usage, private vs commercial
Tracker installed and geographical location where the car will be used
By increasing the deductible amount, you can lower your premiums by being willing to take higher risk. It means self-insuring the increase in the deduction amount.

Tips for buying automobile insurance

When buying a new or used car, you need to buy an insurance cover. Please note previous owner’s insurance cover makes mistakes on sale of vehicle.
The insured price or the amount insured depends on the market value of the vehicle. You have the maximum payment vehicle market value.What is insurance and It’s Benefits ?
If the amount insured exceeds the market value of the vehicle is higher than the market value.
Underinsured is, if the amount insured is less than market price. You are insuring the difference yourself, and will only be partially compensated. For example, if you have insured your car for up to 70% of market value, the insurance company will only pay 70% of the total cost of repairs.

Life insurance

Life insurance is protection against financial loss from death. The designated beneficiary receives the money, and is protected from the financial impact of the death of the insured.

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