Life assures no guarantees; predicting what might happen next in life is nearly an

impossible task. To combat this conundrum, people since the medieval times have

kept a system of ‘insuring’ themselves or their protected interest. The Merriam

Webster dictionary defines insurance as ‘a means of guaranteeing protection or

safety.’ The important question here would be 'safety or protection against what?'

The answer to that would be protection or security against any mishap or loss that

occurs to a person or his possessions. In a day and age where there are more risks

and dangers than ever, it is of utmost importance that one always stays insured.

The entity that provides the said insurance is called an insurer or an insurance

company, and the person who buys the insurance is known as a policyholder or the

insured. The terms of insurance work such that the policyholder provides a small

payment to the insurer, and in exchange for the insurer’s promise to cover the

premium in the event of an unexpected loss. For the insurance to work, the loss

need not be a financial one, but it must be reducible to economic terms, and it must

involve a commodity, possession or a pre-existing relationship in which the insurer

has a vested interest. The contract under which the conditions and the terms of

insurance can be financially compensated is called an insurance policy.

There exists a multitude of insurances because there are a vast number of risks that

can be quantified in financial terms. Specific types of risk that gives rise to claims

are termed as perils. This differentiates the two types of insurance policies, which

are the all-risk policy and the peril policy. An all-risk policy covers almost every

single kind of risk which can be boiled down to financial terms, whereas a peril

policy only includes a certain number of risks which are predisposed in the policy.

India is relatively new in the insurance business. The majority of the population

has a meager capita income, and as a result, do not generally have access to enough

capital to pay premiums for insurances. But as of late a lot of insurance companies

have started providing packages that are readily accessible to the general

population. And with the big players in the insurance business now in India, one

can easily compare insurance policies among the available options and select a

suitable one. Companies also provide many different types of plans based on the

 

risks and premium. Insurance compare quotes can also differ from place to place

and organization to organization.

Our world is full of risks; any financial or personal act that one undertakes faces a

significant number of obstacles. This, however, shouldn’t be a discouraging factor

for someone pursuing anything that they desire. But in order to cover risks, one

must have the wisdom to have an insurance policy for the said deed. Planning and

anticipating risks and dangers well ahead also helps in minimizing it, and steps

taken to insure minimal risk towards an investment using various types of

insurance policies is an excellent practice.