Above is the dictionary definition of “insure”, or, to give it a slightly more wordy angle “to secure indemnity to or on, in case of loss, damage, or death”.
Personal & Financial Loss
During our normal day-to-day lives, we all carry the risk of enormous personal and financial loss. Therefore many of us are willing to pay a small amount of money for protection against certain risks, because that protection provides valuable peace of mind and security against that loss. The term insurance describes any measure taken for protection against risks.
Insurance companies create insurance policies by grouping risks according to their focus. This provides a measure of uniformity in the risks that are covered by a type of policy, which in turn allows insurers to anticipate their potential losses and to set premiums accordingly. The most common forms of insurance policies include life, health, motor, buildings & their contents ,personal property, marine, and inland marine policies.
To Claim or Not to Claim!
When an insured suffers a loss or damage that is covered within the policy, the insured can collect on the proceeds of the policy by filing a claim with the insurance company. The company then decides whether or not to pay the claim. The recipient of any proceeds from the policy is called the beneficiary. The beneficiary can be the insured person or other persons designated by the insured.
PPI b Payment Protection Insurance
In recent years, there has been a significant rise in “payment protection” insurance, or PPI. This is an insurance product that enables consumers to insure the repayment of loans, or credit agreements, should the borrower die, become ill or disabled, lose a job, or face other circumstances that may prevent them from earning income to service the debt.
There has been much controversy over the miss-selling of PPI lately and much media coverage about the banks and credit institutions being made, through the courts, to re-pay thousands of consumers who had been unfairly sold PPI.
UK banks have set up multi-billion pound provisions to compensate customers who were mis-sold PPI, Lloyds Bank have set-aside B#3.6bn, HSBC have provisions of B#745m and RBS have estimated they will compensate B#950m. Payment Protection Insurance has become the most complained about financial product ever!!