Insurance

Insurance

When people think about finance and financial institutions, their minds most often focus on banks, but insurance companies are also financial business entitities and insurance comprises a large part of finance. For example, in Canada, some of the largest insurance companies include Standard Life, Manulife Financial, Sunlife and Industrial Alliance, all handling billions of dollars, some on a yearly basis.

Also, mergers and acquisitions are typical in the insurance industry. On a more practical note, insurance is known to most people as, more often than not, mandatory, car insurance; home insurance and life insurance. For instance, when a new homeowner buys a house, he or she must not only ensure the mortgage (provided there is a mortgage on the house) with a corresponding life insurance, but also insure the house and its contents. Typically, standard home insurance includes coverage for civil liability, as well as the property and the contents.

The contents are valued by the insured, but it remains advisable to keep receipts and/or photographs of valuables, jewelery, furniture, electronics, designer handbags and other expensive items in case a claim must be filed. By the same token, standard insurance clauses include theft, fire and water damage, but as with all contracts reading the fine print may save one a lot of time and money in the long run. Additional coverage may be purchased if desired, which is usually discussed with the insurance broker or sales agent at the time of purchase. Interestingly, a person with a criminal record may be denied life or home insurance. Similarly, and naturally, a falsely filed insurance claim is a serious criminal offense and in addition to being prosecuted under the law precludes one from getting insurance in the future.

Fun is like life insurance; the older you get, the more it costs (Kin Hubbard, an American cartoonist). Illustration: ©  Pizza Pasta. New York. Photo by Elena.

Alternatively, life insurance quotes differ significantly based on the amount insured. Of course, similar to mortgages, pesonal income from employment and other sources, as well as, total wealth and assets are taken into account when calculating the amount available to the insured person.

The premium is the amount paid at regular intervals (usually bi-weekly, monthly or annually) by the insured on the policy (the insuranc contract). Along these lines, the beneficiary is the person to whom the funds (the amount of the insurance to be paid in the case of death of the person’s whose life is insured) will go to, after the insured person’s death; but, the beneficiary may also be the insured’s estate. Moreover, insurance coverage may also be joint, such as in spousal or family contracts, or in cases of business partnerships. Finallly, the term annual premium should not be confused with annuity, which is a different contract an individual may enter into with an insurance company, which guarantees him or her an income in case of disability, or simply represents a form of income under several conditions and in exchange for payment.