Definition, Benefits and Insurance Program Planning
Car Insurance Quote, Insurance is an agreement between two or more parties, with which the party is binding to, by receiving insurance premiums, to reimburse the insured for loss, damage, or loss of expected profit, or legal liability to third parties which may be suffered insured, arising from an uncertain events, or to provide a payment based on death or life of an insured person.
But in a more simple meaning, insurance can be interpreted as a form of cooperation agreements or contractual transfer of risk for loss of life or property, and then the risk is taken over by another individual or company, with premium payments which in this case is an insurance company.
Insurance is the most efficient and effective way to replace that lost income a person’s income.
For example :
- Life Insurance to replace the revenue lost by the time of death or the person is unable to work normally.
- Health insurance is used as a backup for the preparation reimburse or inpatient treatment at the hospital.
- Casualty / Accident insurance, which is used to help pay for any loss or damage caused by the accident.
With so many different kinds of insurance on the market, the number of decisions and planning should be made as closely as possible to determine the choice of type of insurance that will be selected.
Insurance objects in general are properties and services, body and soul, human health, legal responsibility, as well as all the other interests that could be lost, damaged, or loss, or decrease in value. In the insurance field there are several terms that are often used include :
- Insurance Policy: Letter of Agreement that contains insurance agreement between the Insurer with the Policyholder.
- Applicant: People who apply for an insurance. If the insurer has been approved, the applicant will be the policyholder.
- Policy Owner: insurance policy holders.
- Insured: A person who becomes the object insured or insured.
- Beneficiary: The person or consists of several people designated to receive insurance benefits or insurance money
- Sum Assured: Value for money stated in the insurance policy will be paid by the insurer to the Holder.
- Premiums: The amount of money to be borne by the insured and listed in the policy and has agreed to pay to the Insurer in accordance with the agreement.
- Cash Value: The amount of money listed in the policy that will be paid to the policyholder if the policy is canceled prior to the insurance period expires or when the insured dies.
- Insurable Interest: The relationship between the insured and the object is insured by the company, regarding matters that are potentially likely to cause harm that can result in financial losses for the insured.
There are several benefits if we follow the insurance program, they are:
- Tool or Infrastructure Savings
Infrastructure saving means, a number of funds that the insured has no cash value and can be retrieved, including certain types of insurance such as whole life or endowment, there is a type of insurance products are deliberately combined with investments, that is called unitlink.
- Providing Protection or Security.
By having an insurance policy, the insured person will be protected from the possibility of losses later in the day and feel safe and calm his soul because the object has been insured by the insurer I guarantee policy.
- Allocation of Costs and Benefits More Fair.
The greater the risk of loss incurred, the greater the insurance premiums of the insurer policy.
- Giving Levels of Certainty.
A primary benefit of insurance because basically they are trying to reduce the uncertain consequences of an adverse circumstances, which have been predicted in advance so that the cost of such losses become relatively more certain or uncertain.
- Helps Improve Business Productivity Insured
Assured that will invest in a particular business field (High Risk Business) when most of the investment risk can be covered by insurance to mitigate risks that might occur in the future.
- Credit Guarantees
The insurance policy can be pledged as collateral for loans, usually for life insurance and is highly selective for certain types of credit and bank.
Type of Risk to Uninsured
In this life is a risk that we can’t avoid, but can be minimized by reducing or shifting risk to other parties.
However, not all risks can be insured, insurable risk must meet the following characteristics:
- Losses are uncertain (definitive), such as death, illness, disability, and old age, including conditions that can be identified, such as the buildings were destroyed, sinking ships, or the fall of the aircraft.
- Losses occur due to accidental factors, such as critically ill late stage, accident, or natural disaster.
- Losses are assured, as someone who is no longer able to work because of a work accident, the machine does not work anymore because it was heavily damaged.
- Objects insured can be assessed and converted to value for money.
- Risks that occur must be naturally, been unintentional and unplanned.
- The risk that occurs does not violate the public interest.
- Insurance premiums charged value is quite reasonable.
- Parties who request insurance must have an insurable interest.
Insurance Program Planning
Changes that occur in this phase of life must be adapted to the insurance program will be planned as the number of family members or dependents that continues to grow, the addition of assets in the form of a residence, car and health insurance for the entire family.
The foregoing is a condition that requires adjustments in the insurance program you choose.
The following will explain a planning strategy that you can do in the insurance program, among others:
- Set your main goal Insurance.
In managing the risk, there are underlying things, such as the possibility of damage to or loss of property you have. Your decision to buy a new car you have to be balanced with efforts to protect from possible loss and the possibility of physical damage to the vehicle due to an accident.
- Insurance plan goals.
Something to keep you Think is about risk anything you will face in this life? Adjust these risks with your life purpose.
To understand this, you should try to collect as much information as possible about everything about the insurance program, such as what or who should be insured, types of insurance that are needed, the amount of the premium rate, and the credibility of the insurance company.
- Deciding, Selecting & Perform Action
Choose a match to the budget planning that you have created, count back of your insurance needs ranging from the need to buy life insurance, health, and insurance that protects the entire property or assets. Do it one by one and try to be realistic with revenue and budget.
- Perform Evaluation Program You Choose
Think for a period of approximately two or three years or when there is a change in the phase of your life, like getting married, having children, and own their own homes. The need for insurance in the insurance amount will increase as the number of dependents who become the object within the family or the bear necessities of life your parents.