In simple words, insurance is a common fund where insured people are contributing in order to be in a position to recover when they suffer serious financial losses which they could not face on their own. Although many insurance types sound complicated, basic principles that are followed are simple. Insurance companies are evaluating the chances of a risk to happen and the length of damage they can cause. Then based on statistical data they calculate the premium one requires to pay in order to buy ‘cover’ against bodily insurance or financial loss. When an insured event happens the insurance company shall pay the agreed ‘claim’ amount.
What is insurance and how does it operate?
Tags: insurance, insurance company, risk
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