# How an Insurance Policy Works

Insurance is synonymous to plenty of people sharing risks of losses expected from the supposed accident. Here, the expenses of the losses is likely to be borne by all the insurers.

Like, if Mr. Adam buys a new car and wishes to insure the automobile against any expected accidents. He will buy an insurance coverage from an insurance company through an insurance agent or insurance broker by paying a certain amount of cash, called premium, to the insurance company.

As soon as Mr. Adam pay the premium, the insurer (i.e. the insurance company) issue an insurance coverage, or contract paper, to him. In this policy, the insurer analyses how it can pay for all or the main damages/losses that'll occur on Mr. Adam's car.

However, just as Mr. Adam has the capacity to buy an insurance coverage and is paying to his insurer, plenty of others in thousands may also be doing exactly the same thing.


Any one of these simple folks who are insured by the insurer is known as insured. Normally, many of these people will never have any form of accidents and hence there will be no significance of the insurer to pay for them any form of compensation.

If Mr. Adam and a hardly any others has any form of accidents/losses, the insurer can pay them based on the policy.

It should be noted that the whole premiums paid by these tens of thousands of insured is a lot more compared to compensations to the damages/losses incurred by some few insured. Hence, the huge left-over money (from the premiums collected after paying the compensations) is utilized by the **[courtier assurance](https://www.action-prevoyance.fr)** as follows:

1. Some are kept as an income reservoir.

2. Some are used as investments for more profit.

3. Some are used as operating expenses in form of rent, supplies, salaries, staff welfare etc.

4. Some are lent out to banks as fixed deposits for more profit etc. etc.

Independent of the vehicle insurance taken by Mr. Adam on his new vehicle, he is able to also choose to insure himself. This one is very different as it involves an individual life and is thus termed Life Insurance or Assurance.

Life insurance (or assurance) may be the insurance against against certainty or something that is certain to occur such as for instance death, rather than something which may happen such as for instance loss in or injury to property.

The problem of life insurance is just a paramount one as it concerns the security of human life and business. Life insurance offers real protection for your business and additionally, it provides some sot of motivation for just about any skilled employees who decides to to participate your organization.

Life insurance insures the life of the policy holder and pays a benefit to the beneficiary. This beneficiary could be your business in case of an integral employee, partner, or co-owner. In some cases, the beneficiary might be one's next of kin or perhaps a near or distant relation. The beneficiary isn't limited to anyone; it depends on the policy holder.

Life insurance policies exist in three forms:

• Whole life insurance

• Term Insurance

• Endowment insurance

• Whole Life Insurance

In Whole Life Insurance (or Whole Assurance), the insurance company pays an agreed amount of money (i.e. sum assured) upon the death of anyone whose life is insured. As against the logic of term life insurance, Whole Life Insurance is valid and it continues in existence as long as the premiums of the policy holders are paid.

Whenever a person express his wish in having a Whole Life Insurance, the **[les meilleurs mutuelles santé à prix abordables](https://www.action-prevoyance.fr/mutuelle-sante)** will go through the person's current age and health status and make use of this data to reviews longevity charts which predict the individuals life duration/life-span. The insurer then present a monthly/quarterly/bi-annual/annual level premium.

This premium to be paid depends on a person's present age: the younger anyone the larger the premium and the older anyone the reduced the premium. However, the extreme high premium being paid by a younger person will certainly reduce gradually relatively with age over the course of several years.