What is Insurance and Why is it Important for all risk

What is Insurance and Why is it Important for all risk

What is Insurance meaning in simple words

What is insurance you must have heard this often? But you have never thought this ever No or Yes. But in this post I will tell what is Bima? And how is it necessary for us? Should you take insurance or not? If yes, then why? And if not then why?

If it is defined in general language that is a security against accident.  There is no faith in life in today’s time when you do not know. So, taking insurance, we can give a kind of protection to our family. Which is called Bima in ordinary language?

This is a system of management whereby the insurer guarantees the compensation to you in any type of loss, such as illness, accident or accidental death.

This compensation is in the form of a amount. And this compensation can come large or small too.
The insurance company take premiums from all insured are instalments, from which the security of the customers is given in front of the risk. If in direct language insurance is the risk from security. If an insurance company insures a person, then the insurer will compensate the person for the loss of that person.

The insurance company is called insurer, insurer or underwriter. And the person taking the insurer is called an insured or a policyholder. Which is given in the form of a fixed amount is known as premium. When the insurer makes an insurer, then the contract is between the two, and the policyholder is given a written amount and fixed time on a bond paper. If there is an accident during a certain time, the company is given the full amount and risk cover according to the promise given to the policyholder’s nominee. Insurance is the weapon to deal with the fear of any future loss.

Classification of insurances policies

In general words, It has two types

  1. Life Insu-rance and
  2. General Insu-rance

Now we will discuss them with different detail.

  1. Life Insu-rance and

Life insurance is for a particular person or individual. Life insu-rance is a family or an entire family or groups insu-rance. Under this, if a person dies a natural or accidental death, then the family or nominee, according to the promise, is paid by the insured company. But sometimes in both situations, the person does not die, and then the insured company is paid the Sum Assured bonus along with the insured.

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Nowadays, there is a variety of plans available in life insurance such as Money Back and Endowment. But we should remember that life insurance is not meant to earn profit, but it is to compensate for risk cover or loss.

  1. General Insu-rance

The ordinary insurance is of the movable assets of a human being. The ordinary insurance is of the goods, in which the item is lost due to theft, and the financial loss incurred after it becomes incurable. Includes Health Assurance, Home or Property Assurance, Business Property Assurance (shop or godown), Vehicle Insurance and Travel Assurance.

It provide insurances for vehicles through . It is very important; because we go on the road, do not know when it will be an accident. And the losses incurred by Accident in Vehicle Insurances are due to it.

It is very important to take home insurance too. Because the news of the fire coming from short circuit

Keeps coming. Therefore, Home Assurance is very important to save the fire.

Many types of general insurances


There are the main types of General Insurances

  • Health 
  • Car 
  • Travel Insurances
  • Two Wheeler Insurances and
  • Home or Property Insurances.

Importance of Insurances PDF


I have already read in the above paragraph the meaning of life insurance is. It means providing protection and financial support. That is to cover the risk. So much so that we have understood that now we all should take life insurance.

We must take life insurance policy for all members of the family. What happened to see what happened tomorrow? But before all the members of the family are insured, get the head of the house. Because the leader of the family is the important person. If the head of the family becomes an accidental death, who will pay the premium for all the other members.

Life insurance provides coverage on death, accident, disability and prevention of life. If someone has an Accidental Death under Life Insurance, then a nominee is given a fixed sum assured. By which they can start any work and live their remaining life. Keeping these things in mind, the Insurance Regulatory and Development Authority (IRDA) was established in India.

By the way, insurance is very important in our lives. Because we pay a bit of insurance premiums for a small amount and after a few days, that becomes the same big amount. In this way unwanted savings are also done.

The main advantages and importance of this will be as follows: –

  • Survival with untimely death
  • Saves for old age
  • Saving is encouraged
  • Makes a habit of investing
  • Lone loan is also available on the life insurance policy.
  • Social and family security is available.

You can use these insurance policies to meet your investment goals and plan for comfortable retirement. At the top, insurances policy will not only take care of you, but if you do not, they will take care of your loved ones and loved ones to pay for different needs.


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