How To Save Money Through Insurance Company is discussed in this article. We hope you find the information herein helpful.
How To Save Money on Life Insurance
Read Also: What Entrepreneurs Must Have Before Looking for Grants or Loan
Insurance can be explained as the payment of an amount of money by one individual to another on the common understanding that, in certain specified circumstances, that amount of money or more would be paid to the payee by that person who collected the money, for instance, if a shop keeper suffers losses from such things as fire, burglary, and flooding, he can be compensated for the losses, if he had been paying a specified sum of money to an insurance company.
Also, a car owner can insure his car or his building. If the car has a vital accident being that he had paid some amount of money as insurance, or his building suddenly collapses, the owner of these properties can also be compensated for the losses.
Read Also: Functions of the Standards Organisation of Nigeria
Instead of business losses, property losses, asset losses, etc, being on the shoulder of the owner only, the insurance company bridges these gaps through compensation provided the payee had been paying a specified sum of money to an insurance company.
Hence one may ask, what can be that classification of insurance? Let’s take a look at them.
Life Insurance: Many people are not away that life insurance is one of the duties of insurance companies. It is also called assurance because the loss that a person insures against is bound to happen eventually which is death.
Life insurance takes two forms which are either insuring his whole life or insuring his life as an endowment. When a person takes whole life insurance, the sum of money he had insured when he lived will be duly paid on his death to his dependants or the next generation.
Conversely if one insures his or her life through an endowment, this means that a sum of money is paid annually to the assurance company in return for a fixed sum of money which will be paid on the death of the insured person or after a fixed number of years depending on the choice of the payee.
Read Also: 5 Importance of E-Banking in Nigeria
This is important to know that endowment is simply a way or a means of saving as well even as a form of life insurance because the money will definitely attract some percentage of interest.
Automobile insurance: In most countries of the world like Nigeria, some form of motor insurance is compulsory by law. Once a person purchases a vehicle, one of the requirements is to ensure his vehicle in case he encounters any loss.
This is necessary to protect other road users from losses that could be sustained owing to the carelessness or poor driving of some other persons.
Automobile insurance can be done through a third party which is the minimum motor insurance required by law. Here, the driver is insured against any damage he does to another person or another person’s property and not that which he does to his own car.
Also, Automobile insurance can be carried out through comprehensive means though it is the most expensive. Simply with this, the owner of a car will be compensated for any damage he causes to his own car and to other people’s cars.
Read Also: Laws Regulating E-Commerce in Nigeria
Finally, let’s look at fire insurance which is one of the most common insurance means in Nigeria. People take compensation from the insurance company for any outbreak of fire leading to a loss in their properties.
Also, families can take out some form of fire as well as theft insurance called theft insurance. This can be taken out so that compensation is received for any losses caused by theft.
