General Insurance understood

Now let us understand 

why Insurance is done at all ?

What to insure?

What is an insurance policy?

1. General  Insurance is needed to secure the monetary loss of your property. 

2. But this loss should occur in unforeseen circumstances e.g say from accidents.

3. Thus if a loss is sure to happen then it can not be insured and even if got  insured breaching good faith, Claim of such loss is normally NOT paid.

4. Apart from his property, one can insure himself from monetary losses due to accidental bodily injuries and also can  cover his health-related monetary expenses during a hospital stay called a MEDICLAIM POLICY.

Thus AN RISK ELEMENT MUST EXIST.

As you know above insurances are done through IRDA-approved insurance companies in India or other controlling bodies in other countries.

These companies issue a policy defining 

1. What is insured and for how much amount.

2. Period for which covered, which is generally one year.

3. How much money, called premium you paid.

4. Terms and Conditions.

Also important to know is that an insurance policy is a legal contract and thus to make this contract valid, the following features must exist.

1. Your signed request for insurance, called the proposal form giving genuine details of your property at risk or yourself. 

Any wrong declaration in this form may later result in the refusal of the claim.

2. Money paid in advance, which is called premium.  The money cheque should be cleared by bank.

3. Issue of a policy document with details as stated above.

Thus once you are clear about above stated basics it shall be easy for you to read and understand the terms and conditions of the policy and truly appreciate the benefits of your insurance policy.