The insurance policy is an independent commercial contract, in which all the general and particular conditions that will govern the insurance contract are included. It is an onerous and bilateral contract that forces one of the parties (insured) to pay a price (premium) and the other (insurer) to assume the corresponding risk (compensation).
The term policy derives from the Italian polizza, which in turn derives from a Greek term, whose meaning is "proof." Therefore, the insurance policy is a supporting document.
Essential elements of an insurance policy
The essential elements of the contract are the following: the risk, the insured thing and the interest. They constitute the basic elements of the indemnification obligation on the part of the insurer.The insurance policy arises from the need for protection against a risk (possible future and uncertain eventuality). This possibility of the occurrence of accidents requires individuals and society to take out insurance to compensate for the possible adverse effects. The insurance policies being savings and protection elements.
Types of insurance policies
We can classify insurance policies according to the protection they offer:Property: They protect the properties from the damages suffered. In this category are car and home insurance.
Risk: Protect against financial risks arising from accidents, contingencies or negligent actions.
Health: They protect against financial losses caused by illness or injury and generally cover health care expenses and hospitalization.
Income: Protect against job loss.
Life: They protect the legal heirs against the obligations of the owner in the event of his death.
Essential elements in an insurance policy
1 - Insurer / insurance entity: entity that assumes the coverage of the risks covered by this contract and guarantees the payment of compensation.2 - Policyholder, is the natural or legal person that signs the insurance contract.
3 - Insured, is the natural person on whom the insurance is stipulated.
4 - Beneficiary, The natural or legal person who owns the right to compensation.
5 - Policy, is support of the insurance contract.
6 - Premium, is the price of insurance.
