What Is Insurance Policy and How to Go About It

I know in Nigeria today, the word insurance sound so plain. Not everyone knew about and or what the insurance policy is talking about. We have various form of insurance policy especially here in Nigeria and I think you may not be aware of anyone. But come to think of it, you need an insurance policy or cover if you want the very best out from life and its best you read this post more to find out in details what it an insurance policy and how to go about it.

In insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. I hope you are getting the definition for I know it may sound so big in your ears. In exchange for an initial payment known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.

One thing you should note is that insurance contracts are generally designed to meet specified needs and thus have many features not found in many other types of contracts. Some insurance policies are in standard form etc. the insurance policy is an integrated contract, meaning that it includes all forms associated with the agreement between the insured and the insurer. However, in some instances, the supplementary writings such as letters sent after the final agreement can make the insurance policy a non integrated contract. i hope you are getting the picture clearer now. Now let me tell you the general features of an insurance policy.

General features of an insurance policy

The insurance contract or agreement is a contract whereby the insurer will pay the insured if certain defined events occur. Some of the general feature of the insurance policy can be outline below;

-insurance policy are generally considered contracts of adhesion because the insurer draws up the contract and thee insured has little or no ability to make material changes to it.

– Insurance contracts or policy are aleatory in that the amounts exchange by the insured and insurer are unequal and depend upon certain future events.

– Insurance policy or contracts are unilateral, meaning that only the insurer makes legally enforceable promises in the contract.

– insurance policy are governed by the principle of utmost good faith i.e uberrima fides which requires both parties of the insurance contract to deal in good faith and in particular it impacts on the insured.

Having read the general features of an insurance policy, it’s good you know the structure of an insurance policy.

Structure of an insurance policy

Insurance contracts were traditional written on the basis of every single type of risk and a separate premium was calculated and charged for each.

Parts of an insurance contract

The insurance policy carries a wide range of topics and enclosure and it is best I let you know what you will generally see in an insurance contract. I easily outline them for you to see below.

-Declarations

– Definitions

– insuring agreement

– Exclusions

– Conditions

– Policy form

– Endorsements

– Riders

– Jackets

5 Insurance Policies Everyone Should Have

Safeguarding your important assets is a vital step in creating a solid personal financial plan. The right insurance policies will go a long way toward helping you safeguard your earning power and possessions

The following are five important insurance policy that you should have so as to make life meaningful for you and they includes

-Long term disability insurance

-life insurance

-health insurance

-homeowners insurance

-automobile insurance

I hope I have been able to make you know more about an insurance policy or what an insurance contract entails.

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