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Definition of Insurance and Terms

Insurance is the most frequently discussed today. Insurance has become a life companion like other primary needs. Therefore, especially middle to upper class people will subscribe to insurance to a particular insurance institution because of the importance of this. Then coupled with the many famous people who insure their valuable assets in full, such as Cristiano Ronaldo who insured his "legs" at full cost, and also Indonesian celebrity Chelsea Islan who insured his "head". So, what exactly is the meaning of this insurance? And what are the benefits? Please refer to the explanation in this article:

1. A complete understanding of insurance

The term insurance from the English language (Insurance), the coverage. So this insurance is an agreement between two or more parties to provide a guarantee of something promised. In simple terms, this insurance can be interpreted as providing an umbrella before it rains.

Furthermore, after reading the definition of insurance, the two parties that you read above are the insurer and the insured party. The guarantor is the body that covers the insurance from the insured party. Meanwhile, the insured party is the party that insures himself to the guarantor. Then, as long as this insurance agreement goes on, there will be a condition called "Premium". This premium is a cost incurred by the insured party as a requirement to the guarantor body.

There are 3 types of insurance carried out by an insurance company, namely Loss Insurance, Life Insurance, and Reinsurance. Loss Insurance is a company that covers damage, losses, decreases the usefulness of a thing, legal liability on the basis of losses to third parties, arising from an event that occurs. Then, Life Insurance is a company that bears the risk between life or death of an insured life. The third is Reinsurance, which is a company that provides coverage to another insurance company.

2. Terms in Insurance

Here are the terms that exist in terms of insurance:

Insurance policy
Insurance policy is an agreement between the insured party and the guarantor. Then, this policy contains all matters related to approved insurance. Both parties are obliged to know the contents of this insurance including the basic understanding, regulations, provisions and others. This insurance policy will be the evidence and tool for applying for insurance from the insured party.

Furthermore Applicant is the party who submitted insurance to the guarantor. Through this, the insured party will get the policy rights as described above.

Policy Holder (Policy Owner)
Policy holder is a party who has the authority to hold an approved policy.

Well, this insured is the subject insured in the agreement that has been agreed. An example of the insured is the feet of Cristiano Ronaldo who has been insured for safety.

Beneficiary (Beneficiary)
Furthermore Beneficiary is a person who will take money from the insurance against the agreed insurance agreement. Most people who are beneficiaries are the closest people, such as the child, family, or closest friend of the insured.

Sum insured
Sum Assured is a form of responsibility from the guarantor or "compensation" if something happens to the insured (insured party)

Premiums are money that must be paid during the insurance process by the insured party that has been agreed by both parties.

Cash value
Cash value is the amount of money that must be returned to the insured party if an event occurs that results in the contract expiring before the specified time.

Insurable Interest
This is the relationship between the insured party and the insured object.

Thus the article about the notion of insurance and the terms in it. Already understand what is insurance? So, for those of you who feel that insurance is important, it means you have been thinking ahead and are prepared for whatever bad things happen in the future. It means you have bought an umbrella before it rains. This article does not refer you to subscribe to insurance, it's just that insurance is indeed an important thing at this time because we do not know what will happen later.

How, have increasingly understood about insurance? If you think that insurance is necessary, then you have started thinking about your finances going forward. From now on for long-term financial savings are better and neatly organized.