What is Insurance ?

Insurance in its basic form is defined as “ A contract between two parties whereby one
party called insurer undertakes in exchange for a fixed sum called premiums, to pay the
other party called insured a fixed amount of money
on the happening of a certain event."

In simple terms it is a contract between the person who buys Insurance and an Insurance
company who sold the Policy. By entering into contract the Insurance company agrees to
pay the Policy holder or his family members a predetermined sum of money in case of any
unfortunate event for a predetermined fixed sum payable which is in normal term called
Insurance Premiums.

Insurance is basically a protection against a financial loss which can arise on the
happening of an unexpected event. Insurance companies collect premiums to provide for
this protection. By paying a very small sum of money a person can safeguard himself and
his family financially from an unfortunate event.

For Example if a person buys a Life Insurance Policy by paying a premium to the Insurance
company , the family members of insured person receive a fixed compensation in case of
any unfortunate event like death.

There are different kinds of Insurance Products available such as Life Insurance ,
Vehicle Insurance, Home Insurance, Travel Insurance, Health or Mediclaim Insurance etc.