Insurance is a legal agreement between two parties. Yes, when you are getting insurance then always there are two parties involved the first one is the insurer and the second one is the individual. The insured company is titled as the insurance and the individual having the insurance is known as the insured. With this legal agreement, the insurance company takes the responsibilities of bearing the losses of the insured on any sort of Miss happening. The insurance policy can be either a death policy or damage or destruction policy. The happening are called contingency because they are uncertain. In return for the insurer promise, the insured pay a particular amount every year. The amount paid by the insured is known as the premium amount.
Working behind insurance
Well, you may not be aware that how many types of insurance? There are several types of Insurance that one can take. Insurance policies offered by the companies are car insurance, Health Insurance, Life Insurance etc. At the time of insurance, the insurer and the insured gets bound with a legal agreement. That legal document is called an insurance policy. Insurance policy contains all the details regarding the situations in which the insurance company will pay the insurance amount to the insured person. The conditions may be death, damage, accident or any other contingency. Insurance is a simple way of getting protected from the upcoming financial losses. No one knows about the future. But it is important to get insured from the upcoming uncertainty. As we have stated in the above section that the insured have to pay a premium amount to the insurance company. The amount of insurance premium is much less than the amount that insurance companies pay.
While providing the insurance policy the insurance companies check all the circumstances and factors that can lead to any uncertainty. In case of high-risk applicants, the insurance companies do not allow the insurance applications.
What are the tax benefits on insurance?
Along with the security benefits and safety as well, there are several other advantages of Insurance in tax saving.
- Under Section 80C one can easily claim Life insurance premium of up to Rs.1.5 lakh
- Medical insurance premium of up to Rs.25,000 for yourself and your family and Rs.25,000 for your parents can be claimed as a tax-saving deduction under Section 80D
Principles of Insurance
- The principle of Uberrimae Fidei (Utmost good faith)
- Principle of Indemnity
- The principle of Insurable Interest
- Principle of Subrogation
- The principle of Causa Proxima (Nearest Cause)
- Principle of Contribution
- The principle of Loss of Minimization
What are the benefits of insurance?
There are several benefits of having an insurance policy. Here in this article, we are going to provide you with details about the benefits of having an insurance policy. You are suggested to take a glance.
- The first and foremost benefit of insurance is that it covers the payments of losses.
- It helps the person in getting rid of the cash flow uncertainty condition.
- Insurance policies also help insurance owners in promoting risk control activities.
- Furthermore, these also help in decreasing social burdens.
Hence these are the details about Insurance Policies. Now, all we can say is having an Insurance policy is a smart decision if you are willing to get prepared for the upcoming financial situation due to any contingency.