An insurance policy is defined as a document that clarifies the details of an agreement between the insured person and the insured person. The insurance company, in exchange for losses that he or his property may incur, or as a result of his liability for damage or injury to another party, and the insurance policy is used; To limit and prevent risk losses: small and large, noting that the purpose of the insurance policy may be life, car, health, or home insurance. In the United States of America, for example, we find that individuals own at least one of these insurances, and car insurance is considered a legal imperative, and it is worth noting that every insurance company has a special policy regarding the insurance policies that it issues.
The insurance policy is also considered an official document from the insurance company to the insured, so that the compensation cover for the insured comes into effect, and it is a legal guide to the insurance agreement, in which the conditions that cover the compensation are determined, such as the amounts paid by the insurance company, and it also identifies the risks that It can be covered by insurance, the duration of the coverage, the method of paying the premiums, and their value. The insurance policy is issued as soon as individuals agree on the insurance process, and it contains all the conditions, in addition to that all the data related to the insurance are specified.
Insurance policies differ according to the subject matter of the insurance; That is, the insured thing, the purpose of the insurance, and the dangers it covers, bearing in mind that there are insurance documents issued for the benefit of the insured person himself. These are individual insurance policies, including life insurance policies, in which the husband makes a contract in the interest of his wife if he dies, in addition to that there is a type of insurance policies called compound insurance policies, and this type of document covers more than one type of risk, such as comprehensive insurance. On the car, this type is considered more economical than individual insurance policies that cover one risk only, and there are group insurance policies that cover a group of people who have the same conditions against risks, such as: workers, students, and farmers.
Components of an insurance policy
There are three important elements that must be present in an insurance policy, namely:
Insurance premium: What is meant by the price that is determined by the insurance company, and is usually paid in the form of monthly installments, and here the insurance companies differ in terms of the prices they offer to the insured person, and this price also differs, as it depends on the risks that the insured thing may be exposed to on him.
The maximum limit for the policy: where the maximum amount paid by the insurer is specified, in order to cover the covered losses, and the payment period is specified, which may be a lifetime or a specific period.
Deductible amount: It is an amount that the insurance policyholder pays from his own account, before the insurance company pays his claim.
Types of insurance
The insurance policy can cover anything in life, but there are important types that every person must plan for his financial future, and for a comfortable and happy life, to be aware of it, and among these types:
Health insurance: Health insurance is one of the most important types of insurance that an individual can take care of. This is because health is the most important thing in a person’s life, and it is what helps him to live in a better way and fulfill all his desires in life, as a person who does not have health insurance may not be able to get treatment, or pay its costs if he is exposed to an illness or accident. It has a relationship with health, and it is worth noting that the employer can provide health insurance for his employees, and health insurance can be a personal effort.
Life insurance: where life insurance is considered important, especially for people who own a family and have children, as this type of insurance can solve many problems, such as: paying the debts of the deceased person, or filling the deficit in place of the lost income as a result of death, or Paying the expenses of university education for children, and as mentioned previously, it is possible for employers to provide their employees with this type of insurance, and it is also possible to refer to many insurance companies that provide adequate coverage at reasonable prices, noting that the period of time covered by this insurance is from 5- 30 years, if it is for a specific period, in addition to that there is permanent insurance that covers the whole life, if the premium payment continues.
Property insurance: it is property insurance, and it is mandatory when there is a real estate mortgage. Meaning that the borrowing is done from the bank; To buy a house, for example, as in this case the person is obligated to insure the property, and property insurance is important for the owners. Because it protects and compensates them in the event of a fire, theft, or disaster.
Car insurance: There are many countries that impose on people who own cars to insure their cars, and the same is the case in the case of buying a car by borrowing, and in this case insurance is summarized in two types, namely: Liability insurance; Where it covers the damage to the other vehicle in the event of an accident for the insurer, and the collision insurance that covers the damage to the insured’s vehicle, and most car insurance policies cover deaths that occur due to traffic accidents if the insurer is legally responsible.