What does insurance policy mean?

What does insurance policy mean

What does insurance policy mean?

An insurance policy is a contract between an insurance company or insurance provider and a person or business. In this contract, the insurance company is taking financial responsibility in case of an accident that lies within this policy. The insurance policy outlines the terms of the agreement, risks, and conditions that are covered, deductible (if any), exclusions, amount of insurance coverage, and the insurance premium that you have to pay in exchange for coverage.

What is an insurance policy? How does it work?

How does an insurance policy work?

An insurance policy works by transferring your financial risks to the insurance provider in exchange for you paying an insurance premium. You will be protected from financial losses within a specified period from events that are mentioned in your insurance policy. In case the accident occurs, you have to notify your insurance provider and make an insurance claim, and submit the required documents and copies.

How to determine what insurance policy I need?

You should select your insurance policy thoughtfully and consider your health, lifestyle and other external factors, financial situation, and the type of asset you want to protect. In case you face difficulties in determining the best insurance policy for you, you can always get professional assistance from our customer service team with high customer satisfaction.

What is an auto insurance policy, and why do I need it?

An auto insurance policy is a contract between you and an insurance provider that provides financial protection and takes responsibility for unexpected expenses, so you don’t have to worry about paying huge amounts of money out-of-the-pocket.

Usually, auto insurance is legally required in order to drive on public roads. Auto insurance policies might include liability coverage, which pays for damages or bodily injuries you cause to others in an accident, collision coverage, and comprehensive coverage, which can help pay for damage to your own car.

What is a life insurance policy, and why do I need it?

A life insurance policy is an agreement between you and an insurance provider that provides financial protection to the beneficiaries in the event of death. You pay regular premiums to the insurance provider, and in return, the insurance provider agrees to pay a lump sum of money to your named beneficiaries upon the policyholder's death.

We recommend buying this policy if you have dependents that financially rely on you, such as a spouse, children, or elderly parents. After death, the named beneficiary will receive a lump sum and will be able to cover funeral expenses, and debts if the deceased had any and support their living.

Additionally, if you are a business owner, you can outline in your life insurance policy the transfer of ownership in the event of death or sell your assets.

What is a health insurance policy, and why do I need it?

A health insurance policy is a contract between you and an insurance provider that takes financial responsibility for paying your medical expenses, drug prescriptions, and other related expenses in case you get injured or get sick. In exchange, you have to pay your insurance premium monthly or yearly in addition to any copay that may be a part of your insurance policy.
Having a health insurance policy can benefit you in different ways. For example, you can get fast access to medical services in Network hospitals and might not need to pay out-of-pocket expenses for your treatment. Also, some insurance companies might cover your health checkups so that you can prevent diseases and critical illnesses beforehand.

When does an insurance policy become effective?

Effective date is a day, month, and year since your insurance policy becomes active. The date is usually mentioned in your insurance policy. However, additional conditions may apply. For example, for a car insurance policy, you must undergo a car inspection. In the case of health policies, you might have to wait for 90 days to start getting covered.

Policyholder pays insurance premium to insurance company

Can insurance policy be transferred?

In some cases, you can transfer insurance policy. It mainly depends on the conditions outlined in your policy. Some insurance companies will permit you to transfer insurance policy only in case of death, and other companies will allow you to change insured person, beneficiary, vehicle, or real estate.

Which insurance policy seems more useful?

Each insurance policy: vehicle insurance policy, life insurance policy, health insurance policy - has its benefits, so you have to choose an insurance policy based on your current needs. We suggest you carefully look through benefits and exclusions and compare insurance policies to find one which suits your needs the most.

Who is insurance policyholder?

A policyholder is a person who owns the insurance policy and usually is the only person who can make changes to the policy. Additionally, a policyholder is responsible for paying the insurance premium on time.

How to renew an insurance policy?

Usually, you can renew your insurance policy at the end of your current insurance policy active period. Before your new insurance policy becomes effective, the insurance provider must overlook new conditions and risks and adjust your insurance premium. You will receive a reminder to renew your insurance policy

Can insurance cancel my insurance policy?

Yes, in cases you fail to fulfill your obligations or violate the rules. Some of the reasons might include: - increased risks; criminal record; too many missed payments; too many claims, and so on.

Can I terminate the insurance policy?

Yes, you can terminate your insurance policy. Usually, you will have to submit a written confirmation that you would like to cancel your insurance policy, in some cases, you might have to pay a cancellation fee. Please ask your insurance provider for more information.


External factors Are conditions and circumstances that can impact you, but you are not able to control them.
Exclusions Are circumstances and events that are not covered by insurance policy.
Additional fees Are charges that are not included in the original price. For example, administrative fees, late payments, etc.
Death benefit Is a lump sum that is paid to a beneficiary in case the insured person dies.