We face a lot of risks in our daily lives. Some of these lead to financial losses. Insurance is a way of protecting against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.

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Insuring anything other than human life is called general insurance. Examples are insuring property like house and belongings against fire and theft or vehicles against accidental damage or theft. Injury due to accident or hospitalisation for illness and surgery can also be insured. Your liabilities to others arising out of the law can also be insured and is compulsory in some cases like motor third party insurance.

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One of the main reasons one should insure is to protect one’s belongings and assets against financial loss. When one has earned and accumulated property, protecting it is prudent. The law also requires us to be insured against some liabilities. That is, in case we should cause a loss to another person, that person is entitled to compensation. To ensure that we can afford to pay that compensation, the law requires us to buy liability insurance so that the responsibility of paying the compensation is transferred to an insurance company.

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Anyone who owns an asset can buy insurance to protect it against losses due to fire or theft and so on. Each one of us can insure our and our dependents’ health and well being through hospitalisation and personal accident policies. To buy a policy the person should be the one who will bear financial losses if they occur. This is called insurable interest.

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Most general insurance policies are annual – that is, they last for one year. Some policies are given for longer periods – like fire insurance for residences – and some for shorter periods – like insurance for goods transportation or for emergency medical treatment during foreign travel.

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The amount you insure for is called the sum assured. Normally a policy should cover the value of the asset – either the market value while insuring, or the cost of replacing the asset should it be lost or destroyed. The premium will depend on the sum assured.

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Insurance is there to provide protection for yourself, your investment and your business. Disaster could take any form; car breaks down, roof leaks, a major home fire, an automobile accident that leads to a legal action and someone in the family becomes ill. Insurance gives you peace of mind and you know that if anything happens to you, your family or your business that you will be financially secure.

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The Insurance has become an integral part of business and human life. The following are the advantages of insurance: I. Providing Security II. Spreading Risk III. Source for Collecting Funds IV. Encourage Savings.

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Buildings This should be insured for the cost of rebuilding (not the current market value), which can usually be found on the buyers’ report or survey you got when you bought the property (although, if this was not in the last few years, the amount will need to be increased to take inflation into account).

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Call us immediately and we can get your claim started straight away, even if you don’t have all of the information available you can still report the claim. We can then take the stress of your claim away from you. Even if you have an accident when most garages are closed, our 24 hour accident recovery helpline can arrange assistance to recover your car and help arrange onward transportation. By calling us you can be sure that we are aware of the incident and are in a position to represent your best interests. We’re also available to advise you on what your policy covers you for.

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Buildings If you have taken out Buildings cover, your policy covers you as standard for accidental damage to fixed glass and sanitary ware. If you want full accidental damage for accidents such as putting your foot through the loft, you will need to choose this extra option.

Contents If you have taken out Contents cover, your policy covers you as standard for accidental damage to your home entertainment equipment. If you want full accidental damage cover for all of your contents, for accidents such as spilling paint on the carpet, you will need to choose this extra option.

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If you are Fully Comprehensive you are automatically covered for windscreen cover, this is subject to the applicable excess and providing you use an approved repairer. Please refer to your policy book for more details. If you have Third Party Fire and Theft or Third Party Only cover we can offer windscreen cover as an optional extra, for full policy details, conditions and limitations, please refer to our optional extras section.

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Third party liability insurance is a vehicle insurance that covers an insured if his vehicle caused harm to someone else or caused damage to property and he is held legally responsible. Contents As a guide, contents are all of the items you would be likely to take when moving out, including carpets, curtains, furniture, electrical appliances, valuables, clothing and personal items. You should insure your contents for the total amount it would take to replace them at today’s prices.

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Call us immediately and we can get your claim started straight away, even if you don’t have all of the information available you can still report the claim. We can then take the stress of your claim away from you. Even if you have an accident when most garages are closed, our 24 hour accident recovery helpline can arrange assistance to recover your car and help arrange onward transportation. By calling us you can be sure that we are aware of the incident and are in a position to represent your best interests. We’re also available to advise you on what your policy covers you for.

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Most general insurance policies are annual and the premium payment is in advance. No risk commences unless you have paid the premium. In some long term policies companies have the facility of collecting premiums periodically.

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The premium is calculated on the extent and nature of the cover you want. A higher sum insured means a higher rate of premium. Similarly a higher risk will be charged a higher premium. An example of this is that an older person will have to pay a higher premium for health insurance for the same sum insured. Sometimes the risk is higher depending on the location of risks – for example in motor insurance in areas where accidents are higher. So the premium will vary according to the nature and severity of the risk.

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We face a lot of risks in our daily lives. Some of these lead to financial losses. Insurance is a way of protecting against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.

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Life insurance is a legal contract (policy) between you (the insured) and an insurance company (the insurer). In the contract, you agree to pay a fee to the insurance company, either periodically (monthly, quarterly, semi-annually or annually) or in a lump sum. In return, the insurance company agrees to pay a sum of money (face amount or death benefit) to a person (or persons) or entity (e.g. a trust) you designate in the contract as the policy’s beneficiary (provided the policy is in force at the time of death).

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If you have a spouse (or partner) and/or children that would suffer financially if you were to die, you need life insurance. There are others who need life insurance (e.g. business partners), but the main incentive to own life insurance always has been to ensure your loved ones will be taken care of financially should you die.

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You should purchase life insurance now if:

  • If you are married (or about to get married) and your spouse depends on your income.
  • If you have young children (or about to).
  • If you are married and own a home with a mortgage.
  • If you have a large estate and expect that your heirs will be hit with a big estate tax bill.
  • If you are a partial owner of a business and have a buy/sell agreement with your partner(s), but no way to fund the buy-out of your partner’s shares should he/she pass away (and vice-versa).
  • If you have a special-needs child who will need special care should you and/or your spouse die

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To make sure your benefits are distributed to those you intend, you must select a beneficiary – the person (or persons) who receive the proceeds of your life insurance policy when you die.

Without a validly named beneficiary, the life insurance proceeds will be distributed according to the terms of the insurance contract. This may result in proceeds going to family members such as spouse, children, parents or siblings, or it may go to your estate.

Review your beneficiary choices yearly to make sure they are current and to avoid unwanted outcomes or probate. Consider changes in marital status, deaths or other life changes that may impact your beneficiary designation, and update accordingly.

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Yes, all insurance companies allow change of beneficiary with a simple form. Your beneficiary must have an insurable interest, so make sure your new beneficiary fits that description.

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Policy owner

The policy owner is the person who owns the life insurance policy. In many cases, the policy owner is also the person who is insured by the policy. However, the policy owner may also be a relative of the insured, a trust, partnership, or a corporation.

Beneficiary

A beneficiary is the person(s) selected by the policy owner to receive the life insurance payments upon the death of the insured.

Premium

Premiums are the payments made to the insurance company to purchase and keep a policy active.

Death benefit

A death benefit is the amount paid to the beneficiary at the time of the death of the insured.

Face amount

The face amount of the policy is the amount of the death benefit as stated in the policy. This does not include additional amounts that the policy may provide.

Insured/insured life

Policy owner

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Modal premium is simply the premium paid on a policy, based on the frequency of premium payments, which could be annual, semi-annual, quarterly, monthly, or weekly. If you are paying $35.00 monthly premiums, your modal premium is $35.00.

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If you miss a premium payment, you typically have up to a 31-day grace period during which you can pay the premium with no interest charged. If you own a term policy and fail to pay your premium within the grace period, your insurance company will typically terminate the policy. If you own a permanent policy and fail to pay your premium within the grace period, your insurance company, with your authorization, can draw from your policy’s cash value to keep the policy in force. In some flexible-premium policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values and a shortened coverage period.

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