A Basic Guide on Insurance
These days there have been a proliferation of insurance companies all offering to provide insurance with huge profit, which is beneficial to their customers. But as it so happens that the presence of so many insurance providers has been a source of problem instead of being a boon. The common public is misled and very often also duped. They are completely uncertain about which policies are good for them, which of them are subject to market risk. The attractive offers advertised by several insurance companies lure the public into investing only to leave them penniless. It is the duty of the insurance companies to guide their clients on every step of the process to get a safe insurance, which meets their requirements. Hence it is very important to choose a certified and trusted insurance company.
The Oriental insurance was the first initiated insurance company. It can be looked upon as the first step towards contemporary insurance. The Oriental Insurance is a government owned non-life insurance company which was incorporated on 12 September, 1947. With the nationalization of Insurance business, Oriental Insurance became part of LIC till 1973. After 1973, it became a subsidiary of General Insurance Corporation of India till 2003 when it got de-linked and was set up as an independent company.
Insurance-what does it imply?
One needs to know what insurance basically means. It is a way to minimize the loss that may happen on the off chance that there is a mishap by spreading out significant financial risk of a single individual or business to a considerably large group of individuals or other business entities. The insurance company charges an amount to provide insurance; this is the monthly or annual compensation which is to be paid. In the most pure form of insurance if the said event does not occur within the specified timeline, then the money that is paid as compensation is not retrieved.
Some of the terms associated with insurance-
Sum assured-The amount of money which the insurer promises to pay when the insured dies before the predefined time. This case happens in Life Insurance.
Premium-Premium is the compensation paid by the insured for the protection against financial risk by the insurer.
Nominee- The insured specifies or selects a person who is to receive the sum assured and other benefits in case of life insurance. This person is known as the nominee.
Policy Term-Policy is the number of years the insured seeks protection from the insurer.
Surrender value and Paid-up value- There may so happen that before the term of the policy ends a person wants to exit and take back their money. The amount the insurer pays is called the surrender value. Then the policy ceases to exist. And paid up is the amount of the money that is not withdrawn even when a person stops paying premiums mid-way.
One must evaluate their basic need and determine the various factors that come into play before buying insurance.