Insurance is an agreement between two parties (insurer and insured) in which the insurer (usually an insurance company) agrees to indemnify the insured for clearly defined losses. The company does this in compensation for the regular paying of insurance premiums. In essence, it is a method of transferring the risk of an individual to a larger group (the group of all those who pay premiums to the insurer).
Insured is a person from the insurance contract, whose property is secured by insurer. To him belong all rights from the insurance, and he is the person on whose survival, death, disability or poor health depends payment of compensation from insurance. The rights from the insurance also may belong to the insurance beneficiary (in the case of death). That person is determined by the contractor in consultation with the insured.
There are two main types of insurance
- Accident insurance. By this insurance is no certainty that the insured risk will happen. The most common forms of this type of insurance are insurance against accidents (cars, boats, planes), damage of the buildings and from disease.
- Life insurance. Insured is insuring something that will inevitably happen: his death. The only uncertainty is when that will be. Life insurance agents of the insurance company are selling to the people traditionally in their homes; other types of insurance are selling the agents who coordinate the needs of clients with insurance policies available in the market.