Insurer and insured’ are two primary terms of the legal contract of insurance. An insurer is an entity promising payment against covered losses, while an insured is the entity whose loss the insurance policy covers.
Any insurance policy is a legal contract between the insurer and the insured. However, in life insurance policies there can also be beneficiaries or nominees. For example, Rajat insures the goods in his warehouse against loss from fire by paying a premium to ABC General Insurance. Here Rajat is insured and ABC General is the insurer.
In case of a life insurance, the insurer will pay the benefit amount if the insured dies within the policy term. The insurer will pay the death benefit amount to the nominee.
Key Takeaways
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An insurer is generally a company that promises to cover your financial losses due to the specific, unfortunate events listed in your insurance policy. The insurer will charge a sum as a premium for the promise of insurance. The premium acts as a consideration in the insurance contract and makes it legally binding.
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Insured is a person or legal entity whose financial losses are covered by the insurance policy. Under general and health insurance policies the insured is entitled to receive the benefit amount from the insurer for the covered financial loss. However, in the case of life insurance plans insured is only covered under the plan and the life cover benefit goes directly to the nominees.
You can buy Mediclaim insurance for yourself, your spouse and your children as insured under the policy. You can also buy Mediclaim for parents who will be insured under the policy. In these policies, the benefit from the insurer passes directly to the affected insured. For instance, if one of the parents is hospitalized, Mediclaim will directly cover their cost of healthcare.
If you are the primary breadwinner of the family and buy a term insurance cover, you are the insured in the policy. You must choose a nominee in the policy to ensure that the benefits pass on to your family member. In the event of your early demise, your nominee(s) will receive the insurance benefit in the way you had selected at the time of purchase.
India ranked 10th in life insurance, with a 2.73% market share (2019). Premiums grew by 9.63% compared to previous year, outpacing 1.18% global rise.
Source: IRDAI
Here are some steps you need to follow to get insured:
The premium of your policy is determined based on the details you enter and your medical exam results. You have to pay premiums to stay insured.
Note that an insured doesn't need to be a policyholder. Thus, you can buy an insurance policy for others as well. For example, when you buy a life insurance policy for your wife, you will be the policyholder and your wife will be the insured.
An insurance policy only runs smoothly when there is a well-defined relationship between the insurer and the insured. The insurer is supposed to provide financial security and risk management, and the insurers are to fulfil the pre-requisite obligations promptly. This allows seamless claim processing for both parties.
Let’s break down the individual responsibilities of each party.
Responsibilities of the Insurer Include: | Responsibilities of the Insured Include: |
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After coming this far, you must have gathered that the insurer and the insured are tied together based on trust and legal commitment. The financial protection that insurers promise should be true and transparent. Meanwhile, the insured should also disclose all the information clearly and pay their premiums on time. Finding the right life insurance can be tricky with the market flooded with insurance providers. Here, you can put your faith in Canara HSBC Life Insurance with a claim settlement ratio of 99.23%. Comprehensive coverage plans, a variety of riders and plans for each individual of your family- we have it all.
The trust you seek in an insurer is what you will discover with our agents! Other than that, this guide must have already helped you make an informed decision to get the best out of your insurance plan, right?
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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