Before I explain the term “short term insurance”, you must know the term “insurance”. Insurance is legal way of paying for security and safety of your assets. In simple terms, insurance is a risk management process and you take measures for a loss or damage that may occur in future. How is it beneficial? Right question, let us just say that you insured your house and you have been paying the fixed amount of money to the policy holder for that insurance. On one unlucky day, when you were out on dinner with your family, your house was robbed. Now the robbery can be big enough to cost you fortunes, but the insurance policy will now make sure that you don’t suffer from additional headache of compensating that loss!
- Short term insurance covers all types of insurances except life insurance. Short term insurance is an insurance plan for a time interval, in which you make payments for that asset insured and if you face any damage you will be compensated. Otherwise, after that time interval your term insurance will end and you can renew it or get your capital back.
What it covers?
There are many types of short term insurances:
Property insurance: House, office, commercial property, factory etc.
Understanding the terminology:
There are three basic terms you need to know when you are filing for any term insurance policy.
Insurer is the company which provides insurance, as you are the one opting for insurance that makes you “Insurer”. An insurance policy is an agreement signed by insurer and insured binding the two in a contract. Premium is the prearranged fixed amount of money you will pay after a time interval to insurer.
Also having a thorough understanding of what is offered across various term insurance providers can help make a more educated choice. Website like http://www.ehealthinsurance.com/, http://www.termlifeinsurancenews.com/ and http://www.thewealthbazaar.com/ can successfully help you decipher the secret insurance terminology and guide you in the right way.
Losses & Claims:
The amount of payment made by the insurer to the policy holder for a damage covered under the policy. The term “loss” is employed when policy holder receives an amount from insurer in an event, apart from premium.
Claim is a legal process which enables you to compensate your damage of the insured asset (house, car, health). For making a claim, you need file it as soon as the incident occurs. All the claims made by should be covered under policy, claims are documented and you receive your compensation amount.
Term to payout:
The final return of investment made in an insurance policy over a period of time is known as payout or term to payout. Long term insurances offer large payouts but short term insurances gives you freedom to recoup your investment after a fixed predetermined time interval.
How to get a good insurance policy:
Firstly go for the policy that suites you best. Do not focus on large premium deposits for getting more services, focus on terms and conditions laid in policy. Make your demands clear, do not opt for any policy unwillingly and be careful in choosing a reputable and professional policy holder for your job.
Short term insurances such as auto insurance, health insurance or fire insurance require professionals of relevant fields. Go for the company which offers your insurance in best deals.