People buy insurance to share the risk of loss. They pay a fee, called premium, to an insurance. The premium is based on the size of the risk. When people become insured, they take out policies. A policy states what kind of insurance the buyer has, what sort of losses it covers, and how much the company will pay in losses. When policy owner suffer a loss, they fill out a report called a claim. The company checks the claim to see whether a real loss has occures and whether it is covered under the policy. If so, the company pays all o part of the loss, as called for in the policy.
Health insurance helps pay the expenses of illness or injury. A policy may include several kinds of health insurance or just one.
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