Insurance provides security and safety

The main theme of insurance is to ensure safety and security against the damages that may occur in somewhere near futuredue to certain events in the form of compensation.In case of life insurance the payment is usually offered if the deathof the insured party occurs or the period of insurance seemingly matures.Similarly, the insurerbears the risk against losses of property of insured. There are many insurance policies that provides coverage for the property of the policy holder such as coverage against losses occurred by fire, lightening, theft  and likewise the same. In this way, the insurance covers the risk against the uncertain incidents or happening and by any chance if any uncertain activities occur, then the insurer (insurance company) pays to the policy holder in the form of compensation against risk covered for future losses.

What is an insurance contract

Insurance may be defined as a contract between two parties whereby ne party is called insurer who undertakes, in exchange for a fixed sum named premiums, to pay the other party known as insured a fix sum of money on the occurrence of certain event. However, the insurance contract involves the element of general contract and the element of special contract relating to insurance. Furthermore, the special contract of insurances compiles principles  such as, Utmost Good Faith, Insurable Interest Indemnity, Subrogation, Warranties, Proximate cause, Assignment and Nomination, return of premium. Whatsoever, to be a contract considered as valid it must include certain essentials as given below:

Agreement (offer and acceptance).

Legal Consideration.

Competent to make contract.

Free consent.

Legal object.

What is an insurance policy

Not every single individual is well acquainted with the terms and conditions of an insurance policy. The concept of insurance and its policies is still vague to almost every human being. Whatsoever, the term insurance policy generally resembles the conditions implied under certain circumstances. In more precise terms,the written or printed document prepared by the insurer for the insured which confirms that the insurance has been done , which covers the certain damages, losses or any kinds of destruction made on the Insurance policy. Before the issuance of the insurance policy the insured must fill up the proposal forms on which the insurance policy is to be made.

How did Insurance evolve

The main origin of insurance is still vague to some extent.However, it is believed that the practice of insurance was usually carried at ancient times by the Chinese and the Babylonian traders. As a matter of fact, the Babylonian traders emerged a system where the merchant If received a loan to fund his shipment; he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen. Whatsoever, In Rigveda, the most sacred book of India, references were made ti the concept ‘Yogakshema’ more or less akin to the well-being and security of the people. The codes of Hammurabi and of Manu had recognized the advisability of provision for sharing the future losses. However, there is no such evidence that insurance in its present form was practiced prior to the twelfth century.

What is insurance

The term insurance generally resembles a concept which relates to risk minimizer, to some extent.  In more precise term, it can be defined as a device which spread loss over a large number of persons who are agreed to co-operate each other at the time of loss.  It is a process of managing the risk primarily used for being secured against the risk of any uncertain loss that may occur in the upcoming future. Generally, an insurer is a company acting as a cooperative device that spread the loss by selling the insurance; the insured is the person or entity buying the Insurance document i.e. insurance policy. The amount of money charged for a certain amount of insurance coverage is called the premium. However, insurance bears the risk till the coverage period only after receiving the premium amount.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the case of a financial (personal) loss. The insured receives a contract document, called the insurance policy, where details and the conditions and circumstances under which the insured will be financially compensated mentioned.