It is a real fact that the life of each and every one of us is full with unexpectedness and threats. There are several kinds of threats with respect to our life, health, property, business and several other valuable possessions and these threats may cause the quantifiable damages, injuries, liabilities, losses and other negative occurrence. These threats may be avoided and eliminated through preemptive actions and measures. Most appropriated and affordable one of them is insurance. It is equitable transfer of the risk or threat of loss, from one entity to another in the exchange of a specific payment called premium. The risks associated almost with all our financial activities can be eliminated and avoided with the help of insurance in other words we can say all financial, pure and particular types of risks can be insured.
What is Insurance?
Normally insurance contract is being executed between two parties, insurer and insured. The first one is the individual who carried the contract or who takes the responsibility of the risk in case of occurrence. The second one is insured, he is the person who purchases the insurance policy or who transfers the risks associated with his property by paying a specific payment usually paid to the insurer for policy. An insurance contract must have satisfied the all basic requirements of a valid contract prescribed by the law of the state. There must be proper offer which is unequivocally accepted and consideration must be furnished. Usually the company or insurer compensates to the insured for his property which is being insured in case of loss or damages within a specified period.
Nature and Scope of Insurnace Contract
Insurances generally have been divided two main types being called life insurance and general insurance. Life insurance covers the several risks associated with your personal life. The insurer will pay a certain amount to you or your family on the happening any certain event like as death or disability. This policy is being purchase for more than one year. The second one is general insurance; it protects the policy holder or insured from all losses and damages associated with his property and business other than those covered by the life insurance. Usually the time period for this is one year or less. There are several experts and professionals are in the markets are providing these services in order to prescribing an appropriate policy for you.
Understanding the Mortgage property Protection Insurance
As regards the property, there are several risks are associated with your property especially while you have mortgage property. Due to your illness , death, accidental disability or permanent job loss some time you are unable to pay your installment or residual amount which is unpaid by you. This may loss of your home or property and may put you and your family in serious trouble in future. In this case you have to buy the mortgage protection or mortgage property protection insurances policy in order to meet your residual expense or unpaid installments. It promises you to pay your mortgage and other expenditure related to property in case of happening a certain event such as death, disability or loss of your job that may cause the disability to pay your expenditure and installments.
Payment of Amount
While you are purchasing such policy you should have to keep in mind that it is the general rule that the in case of happening the certain event the insurer will pay the check of amount directly to your company not to your family or heir. The time period for this is usually one year or less. The amount will be paid out by this policy either 31 days or 60 days after you are unable to work. Its payment consisting on specified percentage of your income and premium is fixed for the duration of policy. The premium is calculated on by the reference to your age, mortgage amount term and your medical history.