An insurance policy is a contract that exists between two entities, namely the insurance company and the insured. The insured is also known as the policyholder or the person who owns the insurance policy. The insurer agrees to pay the benefits on the behalf of the insurer if certain defined events happen to occur. In exchange for this, the insured has to pay an initial payment or a set of payments paid at regular installments, known as the premium.
In an insurance contract, the contract is drawn up by the insurer and the insured does not have the ability to make changes to it. This means that the responsibility falls on the shoulders of the insured in case there is uncertainty or ambiguity in the contract. In traditional insurance documents, all types of risks are put into the contract and a separate premium is drawn up for each risk. There … Read More