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Insurance For Newbies
By: Marcus Dubois
Insurance is the coverage offered by an insurance company to an individual or an
organization against a specified loss in return for the earlier premiums
received from the policy holder. A premium is a periodic amount of money charged
by the insurance company to provide active coverage.
The premium is usually collected on a monthly or half-yearly basis. The
insurance company will normally terminate the policy, if the policy holder fails
to make the scheduled payment. To renew this lapsed policy, the policy holder
will have either have to pay the balance of the insurance premium or get
reinstated.
The chief advantage of an insurance policy is the feeling of financial security
that it offers to the policy holder.
The different types of insurance polices broadly defined include; Health
Insurance, Life Insurance, Auto Insurance, Homeowners' Insurance and Appliance
Protection.
The premium for the same service can vary depending upon the service provider
and a host of other factors. The premium amount is primarily based on
statistics. Individual habits and history can also play a role in influencing
the insurance company’s decision on the cost of the premium. For instance, a
younger driver with a sports car might have to pay a higher insurance premium
than a middle-aged driver who drives a regular sedan, due to the higher
probability of risks.
Because of the variability in rates and the variability in the formulas that
individual companies use to determine rates, is very essential to get several
insurance quotes before purchasing an insurance policy. Every insurance policy
will have its own merits and demerits. However, the lowest premium quote price
need not necessarily be the best insurance policy, since it may offer only a
lower level of coverage. So, one will have to understand the different clauses
and complexities in the policy. One will also have to do a check on the
reputation of the insurance company, by considering factors such as percentage
of rejected claims and timely reimbursement.
An insurance agent or broker would be aware of the different insurance schemes
offered by various companies. The agent will also be of great assistance in
calculating the insurance premium estimate based on the basic information
obtained and help in determining the best insurance policy for you the first
time insurance purchaser.
About the Author:
Marcus Dubois is a veteran in the insurance industry, and recommends InstaQuoter
to get a free life insurance quote. See http://www.instaquoter.com/life/ for
more information.
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