What is Insurance ?


Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.


An entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer’s promise to compensate the insured in the event of a covered loss.


The loss may or may not be financial, but it must be reducible to financial terms, and must involve something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.


The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The amount of money charged by the insurer to the insured for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster.


Insurance is important because it protects a person or entity from extreme financial loss or responsibility due to an unfortunate emergency, accident or negative unforeseen event. There are many different kinds of insurance, some of which cover a person and some of which cover businesses and other entities.


How does insurance work?


Now that you understand the what is insurance, we can move on to understanding how insurance works exactly. A person would face many risks in his lifetime – the risk of premature death ,the need for medical care at some point, that his/her home may burn down, he/she may be involved in an accident etc. A person can handle these risks in different ways. Risk retention: One, not very wise way, of handling these risks is to retain them, i.e. for a person to bear the risk that he will have to provide for these situations himself, and so do nothing about them. While times are good and none of these events happen, the person need not be worried. But the moment any one of them does happen, they will be in trouble. So it is definitely not wise for anyone to retain, or handle, these risks themselves.


  • Risk transfer: The other way of handling these risks is to transfer them to someone who can handle them properly. In simple words, the process of transferring risks from one person who does not have the capacity to bear them to someone who does have the capacity for them, is known as insurance. At this point, it may be useful to return to our definition of insurance:



Insurance is a contract between the insurance company (insurer) and the policyholder (insured). In return for a consideration (the premium), the insurance company promises to pay a specified amount to the insured on the happening of a specific event.


Insurance, then, is nothing but a risk transfer mechanism wherein the person taking out insurance transfers their risk to the insurance company in return for a payment (known as the premium).


So, from the above explanation we can see that insurance is:


  • the process of transferring the risk from the owner (insured person);
  • to another party (insurer) who can bear that risk;
  • in return for a consideration (premium).


The business of insurance relates to the protection of the economic value of assets. An asset is valuable to its owner because they expect some benefits from it. The benefit can be in the form of income generated from the asset (giving a car on rent) or convenience (using the car for their own travel). Human beings are also assets in the sense that they have the capacity to generate income themselves. Every human being has a finite life span, and death is certain.


But the timing of death is uncertain. If a person dies unexpectedly early in their working life, then their family will lose the income that person would have generated in future, had they survived for their entire working life. This is where life insurance acts to fill the financial gap left behind by the early death of a person. The timing of death is uncertain for everyone, so potentially every human being needs life insurance from an early age, to protect future income. Life insurance can protect the family from financial hardship in the event that the untimely death of an individual leads to a loss of income.


Be aware Insurance cannot prevent the insured event from happening. It can only provide compensation for the loss that comes as a result of the insured event happening.


What are the different types of Insurance offered by Pindersson ?


1. Life Insurance – Pays out a specified figure to the insured or specified beneficiaries on a specific event such as death of the insured.

There are many types of life insurance available today and choosing one can be challenging. It is essential to evaluate the benefits that can be attained from each cover. There are various features and factors to consider when making a decision with regard to this type of insurance.


Within Life Insurance , Pindersson offers you


Term Plans : Traditional Savings Plans : Money Back Plans : Unit Linked Insurance Plans : Whole Life Plans : Monthly Income Plans : Retirement Plans


2. Personal Accident Insurance – This will compensate you if at any single time an external violent event causes you disability, injury or death.


While minor accidents can indispose you temporarily, major ones can severely impact your life and well-being. A sound insurance plan to protect you from economic repercussions of having a mishap has become a necessity. The value of the human life is immeasurable, but with a view to providing some relief to the injured person or a dependent, personal accident insurance is available. A person should purchase the policy that covers or provides reimbursements for all eventualities from short-term impairment to untimely demise, and safeguard the family’s future.


3. Medical and Health Insurance – You’ll need it to ascertain continued flow of income if you fall sick or get injured to the extent that you can’t work and earn as before. It also covers cost of medication, hospitalisation and surgery. Pindersson specializes in Health Insurance .Please click on this link to go to our Health Insurance Page


4. Vehicle Insurance – If you own a car, motor cycle or any other motor vehicle, this insurance covers it against accident or theft. A compressive package covers all possible losses as well as damages to third parties such as pedestrians.


5. Home Insurance – Take this cover to insure your home against loss or damage as a result of fire, electricity fault, plumping malfunction, flood, etc.


6. Travel Insurance – When travelling alone or with your family, this cover ensures you’re compensated for any loss, damage, injury, sickness or inconvenience that comes up as a result. It may cover personal accidents, hijackings, travel delays and more.


7. Workers Compensation – An employer takes this policy on behalf of their employees to cover loss of income or medical expenses resulting from a work-related injury or sickness.


8. Mortgage Insurance – The cover comes to the aid of a lender if a home buyer defaults.


The bottom line is that Pindersson provides you different types of insurances that can give you peace of mind by offering protection against uncertainty. Thus, ascertain what a specific insurance policy covers to decide which one best protects your assets.


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