Contents
What is insurance?
What is insurance: By combining their assets with those of a more manageable number of other people, a person who is vulnerable can obtain the financial support they need through the purchase of insurance. For those interested in a more in-depth explanation, the insurance company will distribute one’s risk across several different policies. Through these means, financial support can be provided to the individual who is in risk.
Let’s imagine someone needs therapy that costs Rs 5 lakh, but it’s hard for him to raise that much money on his own. In this scenario, it would be best to seek financial assistance.
After that, the insurance company provided financial aid to the one individual by making use of the monies supplied by the additional twenty people. To put it another way, insurance is the practice of spreading one’s potential losses among a wide number of individuals.
What are the types of insurance?
There are three types of insurance.
E.g.
- Life Insurance.
- Health Insurance.
- General Insurance
What is life insurance?
A sizeable percentage of adults in this day and age have either life insurance or life insurance (life insurance), and they are well aware of the significance of having both types of coverage.
(A Breakdown of What Life Insurance Entails) In the contemporary civilization in which we currently reside, misfortunes of any kind are capable of happening at any point in time in the far future.
And in the event that an accident does take place, it may take place to you, it could take place to something you hold dear, or it could entirely take control of your life away from you.
Every one of these things is a distinct possibility. It is impossible for anyone to know what will take place at any given time in their lives.
Because of this, in this random life, if you have already insured yourself and your other belongings, then at the wrong time you will have the opportunity to obtain a lot of financial support or make a lot of money for yourself.
If you have not insured yourself and your other belongings, then you will not have this opportunity.
One of the most convincing arguments in favor of purchasing life insurance is so that you may ensure your loved ones will always have access to financial support, even after your passing.
Because of this, I have made it a point to stress to everyone in my immediate environment the significance of ensuring that one has adequate life insurance coverage.
Life insurance requirements and why?
If you are the only source of financial support for your loved ones and you have a family, getting “term life insurance” is an imperative necessity for you to take care of your loved ones.
“Term life insurance” is a type of insurance that gives a predetermined payout to the policyholder’s family or designated beneficiary in the event that the insured passes away within the policy’s term, regardless of the cause of death.
Top 10 Life Insurance Companies in Bangladesh 2023
Prior to purchase insurance, one should give some thought to the amount of money that will be paid out to the family of the policyholder in the event that the policyholder passes away.
Once your survival amount has been subtracted from the total amount of your premium, which is also referred to as your “Sum insured value,” the remaining balance will be determined. Moreover,
Your monthly payment will increase in direct proportion to the total value of your sum covered. Following that, you ought to have a better understanding of what life insurance is and the reasons why it is essential to get life insurance.
What is health insurance?
There is no difference in meaning between the terms “health insurance” and “health insurance,” thus you can use either one.
The form of insurance known as health insurance is the kind of insurance that will pay back any and all expenditures related with any future hospitalizations that you may require.
The “health insurance company” will pay the charges of that hospital to the company to which you have paid the premium in order to cover the costs of the hospitalization in the event that it becomes necessary in the future for the person whose name is insured to be hospitalized for treatment.
It is essential to keep in mind that the insurance provider will only pay out the “sum insured value,” which corresponds to the whole amount of money that you have insured.
However, before engaging in this kind of insurance, it is necessary to ensure oneself by adhering completely to all of the regulations and undertaking independent verification. Only then may one engage in this type of insurance.
Health insurance requirements and why?
These days, not having health insurance is an unacceptable option under any circumstances. Because even if you have to be admitted to the hospital for the most inconsequential of reasons nowadays, it will still cost you a considerable amount of money for the service.
In the event that you do wind up needing to take Roger to the hospital, regardless of the reason why, you are going to burn through all of your available financial resources very rapidly.
Even if you find yourself in a difficult financial situation and require a substantial amount of money, if you have health insurance, you will not be obliged to pay a single penny for any of your medical expenses in this case since you will not be responsible for any of the costs.
The insurance provider will either pay the overall cost of your stay in the hospital out of their own pocket or use the total amount of the Sum insured value that you have accumulated in order to pay for the full cost of the hospital bill.
You should now have a better grasp of why it is so necessary to have health insurance in today’s culture to have health insurance.
What Is General Insurance
The only sort of insurance that is not included in what is known as general insurance is life insurance. General insurance includes all other types of insurance.
That being the case, any and all forms of insurance fall under the umbrella term of general insurance and are in no way connected to the protection of human lives.
To phrase it another way, people buy insurance to protect things that are valuable to them in addition to their health and vitality.
In the event that your belongings are stolen, destroyed, or damaged, your homeowner’s insurance coverage will compensate you for the costs associated with replacing or repairing them.
This category encompasses a wide range of different types of insurance, some of which are: accidental insurance, travel insurance, auto insurance, fire insurance, building insurance, and many more besides.
How does insurance work?
When discussing insurance, the most essential premise that supports the concept of insurance is referred to be “risk pooling.” Many people are prepared to get insurance in order to safeguard themselves against a certain kind of loss or damage, and in exchange, they are willing to pay any premium that may be demanded of them.
This group of people also goes by the label “insurance pool,” another name for the group. Now, the firm is aware that the number of people who are interested is incredibly big, and at the same time, they require insurance coverage for so many people that it is practically difficult to supply it to all of them.
As a consequence of this, it makes it possible for companies to obtain capital at regular intervals and to get rid of it whenever and wherever the appropriate scenario presents itself. Automobile insurance is probably the most archetypal example of this phenomena.
I’m curious about how many of us have really filed a claim on our auto insurance, despite the fact that we all have it.
If you have insurance and have paid premiums to cover the chance of suffering a loss, you will be entitled to financial compensation in the event that the event in question takes place.
When you buy an insurance policy, you will be obligated to make regular payments to the insurance company in the form of a policy premium.
These payments should be made on a continuous basis. If and when you choose to file a claim, the insurer is obligated to pay for any damages that are covered under the policy.
With the help of risk data, companies determine the likelihood of an occurrence so that they may decide whether or not to purchase insurance against it.
The cost of the insurance premium will increase proportionately with the likelihood of the event occurring.
Underwriting is the term that refers to the process that is in question. Insurance firms are only concerned with establishing the actual value on the market of the entity that is insured in accordance with the stipulations of the insurance policy.
For instance, if you have your ancestral home covered for Rs. 50 lakh, the insurance company will only consider the real value of the home when deciding whether or not to pay out the claim.
Because it is impossible to put a monetary worth on feelings, it will not acknowledge the amount of emotional weight the property is able to bear for you. This is because it is impossible to place a monetary value on emotions.
The protection that is offered for a piece of property or an item does not take into consideration either the true value of the item or the value of any emotion associated with it.
Despite the fact that the specifics of each policy are different, this is one of the three fundamental general criteria that are consistent across the board for all different kinds of insurance plans.
Policyholders have a responsibility to disclose information on the claim so that insurers can estimate the level of risk involved in calculating a premium for the policy.
Under no circumstances is it acceptable to do someone else harm on purpose. We’ve already gone through the first two points that were mentioned up there.
The final component of this explanation is one that requires somewhat more concentration to fully comprehend.
An insurance policy is a specific type of contract that can be created between an insurer and an insured party. This contract can protect either side from financial loss.
It is referred to as a ‘absolute faith agreement.’ This suggests that an implicit but basic understanding between the insurer and the insured does not often exist in a regular contract between the two parties.
As part of this agreement, you are required to provide any and all pertinent facts and to refrain from making any assertions, regardless of whether or not those assertions are true.
If you fail to give all of the essential facts, an organization may refuse to settle its claim for one of several reasons; one of these reasons is the duty of ‘honest faith,’ which requires you to act in good faith.
If you fail to give all of the essential facts, an organization may refuse to settle its claim for one of several reasons. This street is one that can be traveled in either direction.
A duty of “honest faith” is owed by the company to the consumer; in the event that they do not fulfill this duty, the company runs the risk of getting into significant legal trouble.
Benefits of insurance
Consider the fact that you have a monthly income of 50,000 rupees, which adds up to 7 lakh rupees over the course of a year.
If you save ten thousand rupees each month, your total savings after a year will only equal to one million twenty thousand rupees. This is assuming that you save the whole ten thousand rupees each month.
Imagine that you or a member of your family sustains an unforeseen sickness as a result of a recent accident and need Rs. 5 lakh to cover the expense of the operation. What do you do now?
At this point, you are going to need to borrow money from another person or take a loan from a financial institution in order to cover your expenses.
The fact that the bank does not give loans in a timely manner creates a great deal of difficulties, and it is general knowledge that the interest rate that the bank charges is substantially greater than what is offered by other financial institutions.
If, on the other hand, you used the money you saved each month to pay for insurance, then, in the case of a crisis, the insurance company would be there to lend you a helping hand.
Regardless matter how much money you make, if anything unexpected happens to you, it won’t take you more than a few days to blow through all of the cash you’ve worked so hard to get.
In the event that something unforeseen happens to you, your insurance coverage will act as a protective barrier for you to stand behind.
If you are involved in an accident and have insurance, your insurance company will be there to support you financially in the event of the accident. If you do not have insurance, you will be responsible for any costs associated with the accident.
Types of insurance
In general, there are three different types of insurance; nevertheless, there is a wide range of options accessible for insurance policies. On the other hand, the type of insurance that is most usually seen is. To clarify:
- Life insurance
- Health insurance
- General insurance
- Takaful insurance
- Pension insurance
- Education insurance
- Accidental insurance
- Travel insurance
- Wealth insurance
- Fire insurance
- Home insurance
- Car insurance
- Business insurance
- Harvest insurance
In addition to this, insurance companies typically offer a wide choice of extra insurance plans, the specifics of which can differ from one insurance provider to the next.
The filing of insurance claims and the payment of premiums can be handled in a number of different ways by contacting other companies.
For this reason, it is quite necessary for you to choose an insurance company that can be relied upon for your protection.
How many insurance companies are there in Bangladesh?
- At present, there are 69 insurance companies in Bangladesh.
- There are 33 life insurance companies.
- And there are 48 general or non-life insurance companies.
- There are two government insurance companies (one life and one non-life)
Top 10 life insurance companies in Bangladesh
- Metlife
- Delta Life Insurance Company (Delta life insurance)
- Life Insurance Corporation (Jiban bima corp.)
- The famous life insurance company
- Sanghani Life Insurance Company (Shandhani life insurance)
- Meghna Life Insurance Company
- Takaful Life Insurance Company
- Pragati Life Insurance Company (Pragati life insurance)
- Padma Life Insurance Company (Padma life insurance)
- The Sunlife life insurance company
Top 10 Non-Life Insurance Companies in Bangladesh
- General Insurance Corporation
- Green Delta Insurance Company Limited
- Express Insurance Company Limited
- Pioneer Insurance Company Limited
- Desh General Insurance Company Limited
- Title Insurance Company Limited
- Bangladesh General Insurance Company Limited
- Bangladesh National Insurance Company Limited
- Continental Insurance Company Limited
- Dhaka Insurance Company Limited
What is mean by insurance premium?
The amount of money that a policyholder is required to pay on a regular basis to an insurance company in order to keep an insurance policy in effect is known as the insurance premium.
It is the amount of money that the policyholder pays to the insurance provider for the protection offered by the insurance policy. Depending on the conditions of the insurance, the premium can be paid on a monthly, quarterly, semi-annually, or annual basis.
These payment intervals can also be combined into one. The amount of the premium is based on a number of factors, including the kind of coverage, the amount of coverage, the policyholder’s age and health, the likelihood of a claim, and the policyholder’s previous claims history.
The insurance business relies on the premium as a significant source of money, which it then puts toward the settlement of claims submitted by policyholders.
