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The primary purpose of insurance is protection. A secondary purpose is to use it as a form of investment.
Protection is geared towards oneself, one's family, and one's assets, such as homes and cars.
Insurance is defined as a financial arrangement between individuals and insurance companies to protect against loss or injury. Individuals take out policies (contracts) and make premiums (payments) to insurers. Every policy includes agreements, exclusions (items not covered), conditions, deductibles, endorsements (amendments or additions to the basic policies.)
The individual denied insurance can try other companies and check with the state department of insurance to find out about rights and responsibilities.
Terms common to many insurance policies are:
1. Deductible - the out-of-pocket amount that the insured must pay before the insurance company will start paying.
2. Premium - the amount that must be paid to the insurance company to keep a policy in effect. It is usually payed quarterly, semi-annually or annually.
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