Two of the basic terms of the legal contract of insurance are ‘insurer and insured’. Any insurance policy is a legal contract between insurer and insured. However, in life insurance policies there can also be beneficiaries or nominees.
The Insurer is any company that agrees to provide you with insurance, i.e, offer to provide financial support after a hazardous event. An insurer can be an insurance company as well as an underwriter. Here are some tasks that an insurer performs:
a) Assesses how much risk you possess to the company
b) Background checks your information
c) Provides a quote based on the information
d) Gives detailed information about the policy
e) Takes care of coverage and claims after you purchase the policy
A person whose risk an insurer covers financially through an insurance contract becomes an ‘insured’. Thus if you buy an insurance to cover you against accidents, you are insured of the policy. The insurance policy will only pay the benefits if you are hurt in an accident, and not for anyone else.
Here are some steps you need to follow to get insured.
a) Research about various types of insurance
b) Contact an insurance provider
c) Fill an application form regarding your basic details
d) Undergo medical tests
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.