There are different insurance companies in UK providing the different type of insurance including life, car, health, accidental, mobile, theft, fire and other insurances. As an insurance policy is a type of contract in which an entity receives financial protection in uncertain circumstances from an insurance company. The Company sets the type of insurance contract between the insurer and policyholder to pay a premium to the insurance company, and term and condition on which the company agrees to give you protection for your loss after an unforeseen event like death or an accident etc.
Importance of Insurance
The world we live in is full of risk, this is why insurance is important to our life. Our families, assets, business, property could go through different types of risk. These risks include uncertain death, an accident etc. These losses develop need of insurance to be compensated with the financial resource from an issuer.
Functions of Insurance
- It gives protection to you and your family. The whole family depends on your financial support and for the safe side of you and your loved one to take insurance policy for unexpected and uncertain circumstances.
- On any unforeseen event like an illness, injury, any permanent disability or uncertain death, can leave your family is facing financial stress. So Insurance reduces your financial stress and you can focus on other circumstances of life.
- Medical insurance gives you the medical support in case of uncertain illness and you are unable to bear your medical expenses, the insured get the medical support I case of medical insurance policy.
- Insurance plays an important role in the development of the country’s economy. A large number of funds are collected by premium. These funds utilized in the industrial growth of the country, which develops economic growth.
Types of Insurance Policy
There are many types of insurance policies but most used & importance are
Life insurance is the most important type of insurance in which insurance company pays you the sum of money either on set time period or death to his beneficial. Terms of Life Insurance policy is approximately 30 years. After that if an individual die the maturity amount is paid to nominee and if an individual alive than amount is given to him
It is the type of insurance that gives you protection on your losses on other things except life insurance. This insurance includes
- Home insurance
- Health Insurance
- Auto insurance
- Personal accident insurance
- Medical and health insurance
Advantages and Disadvantages of Insurance
Insurance provide remarkable advantages, not provided by any other financial program but beside this it also have some disadvantages
Advantages of Insurance Policy
Protect your Family When you Gone: As it is impossible to predict the future. Life insurance provides helping hands to your family when you are unable to support your family after death.
Providing Security: Insurance gives protection to the individual and their family. There may be a fire in the house or the factory or a car accident insurance gives you full security by paying the loss. If in the car accident your car is damaged than according to the terms and condition insurance company will bear the loss. It provides complete financially security in any unforeseen event.
Saving Encouragement: Insurance policy does not only give you protection in your unforeseen event but provides investment area too. It is a great source through which you can save money by paying a premium amount. The sum-up money will be paid to you after the maturity of the policy
Disadvantages of Insurance Policy
Takes too much time: It takes too much time to gives you payment of your losses due to long and lengthy legal formalities
Premium is Higher than Maturity amount: Sometimes the amount of premium is higher than the amount paid by an insurance company at the time of maturity
Lead to Crime: Insured may lead to crime to get the payment higher than the loss of insured or for the purpose to get the insured may one of family member kill the insured so they can get sum insured as a nominee.
Fewer Facilities: It may provide saving and investment encouragement, but does not facilitate as bank do
How Insurance Premium Amount is Calculated?
Premium amount of an insurance policy is calculated by a specially designed calculator to know the actual amount to be paid as a premium. You just have to fill out the basic information that the calculator recommended you the plan
There are four basic factors to calculate the premium amount such as:
- Age of entity
- medical history
- In taking habits
- terms of policy
List of Top Insurance Companies in UK
|NO||Company Name||Total Assets||Market Capitalization||People reviews|
|2||Legal & General||£467.854||19.01B||3.2|
|6||Phoenix Group Holdings||£85.999||3.68B||3.8|
|8||RSA Insurance Group||£21.139||7.58B||2.8|
|10||AIG Europe Limited||£13.093||49.319B||3.1|
As every financial instrument have some advantages and disadvantages. We have to choose according to our needs and their term and conditions. They have some tricky terms and conditions that we don’t read propyl at the time of buying and after that on the time of loss or maturity insurance company does not pay the whole loss or less maturity than the premium is paid.
So we have to be careful before buying the policy and clearer terms and conditions. Besides all this insurance policy gives protection and security to the family of breadwinner. It is a great way to feel secure and satisfied that your family and loved one will have some financial protection after any loss or your death. Insurance helps the industrial growth of the country. It also gives you saving encouragement. It is the best way to generates financial resources.