Insurance for dummies
The concept of insurance developed in response to the fundamental and universal need for security and protection, aiming at managing uncertainty about the future and protecting against risks – perhaps remote but nonetheless predictable – about life, health, property and in general all those situations possibly involving a quantifiable damage. Some people hope to avoid these risks with superstition, others with a rational and careful behaviour.
But often you need someone who is able to professionally manage these events and who is solid enough to face them even over the years. This is the role of the insurer. During all life activities and all of its moments, insurance allows people to build a more secure future with the peace of mind to make choices and plan their future.
There are numerous types of insurance agreement, but each of them includes the key principles on which the insurance industry is founded: the need to ensure future economic stability and security, the principle of solidarity between similar groups exposed to the same risk scenario and the relationship between the insured and the insurer, who is required to compensate the eventual damage occurred to the insured upon the previous payment of the insurance premium.
Insurance is a promise based on trust, the good insurer is the one who promptly delivers on this promise turning a difficult situation in a more bearable one.
Insurance and the main types of policies
Insurance for companies and Global Business Lines are designed to meet the need to properly manage the uncertainty and risks of business activities, which involve a continual series of assumptions about the future.
Policies covering personal injuries are designed to provide the insured party with sufficient financial resources to deal with accidents and sickness. In the extreme case of the death of the insured party due to an accident, compensation is paid to the beneficiaries of the agreement or, alternatively, to the insured party's heirs.
Policies covering damage to property are usually differentiated by the type of asset or type of damage. They can cover an asset against any damage, against specific damage or a combination of the two. An asset can be insured against direct damage and consequential damage.
Property and casualty insurance is an agreement that covers the insured party against the risk of a damaging event and consequent asset loss.
Pension funds were created to provide employees with a supplementary pension, in addition to the pension paid by public social security institutions.
Investment policies have a relevant financial component: the amount of the benefit for the policyholder is linked to the performance of an underlying financial asset.
According to the type of event covered by the contract, pure-risk policies can be divided into three main categories: life insurance with survival benefits, with death benefits and mixed life insurance policies providing both survival and death benefits.
Life insurance is a contract under which the insurance company undertakes to pay either a lump sum or an annuity if an event occurs involving human life, in exchange for the payment of a premium as remuneration from the policyholder for the risk taken on.
Life is full of surprises. Sometimes they are good, sometimes they aren’t. And this is in fact the primary purpose of insurance, to professionally protect us when things don’t go as planned in our daily life. But insurance helps us also when we need support for our longer term life projects. In both cases they give us peace of mind.