Someone who has been working 7+ years at an insurance company talks everything about anything we should know about the insurance company.
What does an insurance company sell?
- Most of what is called "life insurance" is just another tax-efficient savings products. You put money into more-or-less at will - insurance companies manage it for you (for a fee) - You can take your money back whenever you want or on the date specified.This is the "insurance" in the sense that the company will guarantee the amount that you can take back (for example in the form of the annual increase at x%) and that the money will be available in the date, set in the contract.
- Property and accident insurance (P & C) also health insurance, a promise to refund your money for the damages You suffered.
For example, the window of your car gets broken, you go to the repair shop, to have the window replaced, you pay for the "damage".
You file a claim with the insurance company sending a copy of the Bill, and they give you the money back. (They might pay the garage directly as well – a process that, would in fact be different.) Or damage is the value of improvements to your home that burned. This is the same case with health care, by the way: the insurance company pays the Bill for you. The amount paid by the insurance company may also include reduced or are they just paying a percentage of the total costs, etc. There are many variations, but the principle is the same.
- Other parts of life insurance work like P & C, by the way, imagine you die tomorrow, that would be the "damage" to your spouse and children. So you can take the insurance contracts that will pay the specified amount (say, 500 000 Usd) to cover the risk of death or disability (or disease), etc.
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