The Role Of Insurance Companies

  Insurance companies may be classified in two groups. Life insurance companies- which sell life insurance and pension funds. And General or Property insurance- which sells other types of insurance such as car, household, or other valuable objects.
An insurance company is a company selling insurance to a policy holder. Buying insurance is a form of risk management which is transferred from one party, the person buying the insurance to the insurer, the insurance company. Things to be insured range from automobiles to household good; health and death. The insurance comes in the form of a contract that is called a policy. The insured pays the insurance company a premium, based on a quotation called the insurance rate which is determined by the amount of risk involved for the insurance company. An example of this would be life insurance, if you are a healthy person who does not smoke or indulge in other life threatening behaviour you are considered a lower risk and so your premiums will be lower. If however you smoke or have current illnesses the risk that you will need to claim against your insurance policy is higher and therefore your premiums will also increase. People take out insurance for varies things but the reasons are always the same, to be ensured that if the object or person being insured is no longer there due to reasons out of one's control that the monetary value of the item will be paid out so that the item can be replaced. Obviously there can be no monetary value to the life of a loved one, but the money does ensure that those left behind to not have to suffer the financial burden of their loved one's passing.
How do they pay claims?
In the eventuality that a loss does occur the insured person or policy holder has to fill out a claims form. Each insurance company has a claims department which investigates and settles claims made by the insured. The claims department will assess whether the insured has coverage available under the terms of the insurance contract. The financial strength and stability of an insurance company should be considered before buying any insurance policy. As most claims could be settled within years to come, it is important that the company is viable.
How have insurance companies progressed?
As many people can feel discouraged by paying high insurance premiums and never seeing any benefit from their monthly installments, many insurance companies are now offering more in the way of services and bonuses. Some companies offer what is called a cash back bonus which is a reward bonus which returns cash to clients who remain claim free. Other types of services include free roadside assistance, in the event of being stuck on the side of the road you can get the help you need at no cost.
Insurance companies are rated by various agencies and a list of registered insurance companies can be found on the internet. It is advisable to do your research on an insurance company before you take out a policy.