Meaning of insurance policy (what is it, concept and definition)

What is Insurance Policy:

An insurance policy is a document that validates the insurance contract made and signed in accordance by both the insured and the insurer, which specifies the rules, rights and obligations of the parties involved.

The word "policy" derives from the Italian polizza , which means proof or proof, and "insurance" originates from the Latin securus and indicates tranquility.

Hence, the contract that is drawn up is called an insurance policy so that individuals or companies can count on the tools and legality necessary to cope, if necessary, with any circumstance of personal or material damage.

An insurance policy is carried out between an insurer and an insured.

The insurer is the legal person (company or insurance company that offers a set of premiums, that is, the cost of the insurance) that assumes and carries out the assigned responsibilities in the event that the insured requires their service due to a claim..

The insured, for his part, can be both a natural or legal person and is the holder of the contract and on whom the consequences of the claims fall.

The insured may include one or more beneficiaries in the contract, who is the third person who is also entitled to the insurance policy as requested by the insured.

The purpose of insurance policies is that people feel calm having a financial backing that they can count on in emergency cases due to a claim and even an illness, to protect health and material goods such as houses, vehicles, companies, real estate, among others.

The insurance policy is made up of a set of general conditions and a set of particular conditions.

The general conditions are the norms and principles established by the insurer to regulate insurance policies destined for the same area and with the same guarantees: object of the insurance, premiums, general risks, how to pay the claims, how to assume the compensation, among others.

For their part, the particular conditions refer to the regulations that must be followed to insure individuals, material or intangible assets, under what concept the insurance is carried out and how far it can cover, duration, cost, among others.

There are various types of insurance policies. For example, medium and large companies usually take out collective insurance policies to be able to insure all their workers.

There are also individual policies, they are those that are personally contracted according to the possibilities and needs of the applicant.

There are also policies whose contracts support real estate, pets, vehicles, theft of material or immaterial property, electronic or work equipment, among others; as well as natural disasters such as fires, floods, total or partial losses.

However, among the most requested insurance policies are vehicle policies, since it is mandatory when a vehicle is purchased, whether new or used, and allows compensation to be made in the event of traffic accidents, theft or damage. To thirds.

The life insurance policy is also often highly requested since it consists in guaranteeing the well-being of the insured and of the beneficiaries. In this case, the payment of a premium is made, which may be collected in the event of death by the beneficiaries or disability by the same insured.

See also the meaning of Security.