What is insurance?

What is insurance?

An amount is paid in advance so that in the event of an adverse event, we receive the benefit.Insurance is also a method of saving to prepare for our future or that of our family, as in the case of retirement.

Insurance is the most effective means of protecting ourselves against risks, guaranteeing a benefit (an indemnity or a service) to compensate for the damage caused by certain accidental situations.

Risk

What is risk?

What should I do when faced with risk?

Risk is something that may happen in the near or more distant future, and its consequences are a cause for concern, since it exists in every activity.

The first thing is to recognize its existence.

In addition to its negative side, related to losses and damages, it can also be positive when the risk allows us to make a profit. For example, when we receive a savings insurance benefit at a certain age.

Next, assess its importance.

In either of these two scenarios, insurance is one of the most effective responses to the consequences of risks and a guarantee against future adverse situations.

And finally, select the best response from among the various alternatives, adapting it to your resources.

The Principles of Insurance

1. Human solidarity

2. Indemnity

Insurance is based on sharing losses among a very large number of people who are threatened by the same danger and who are jointly and severally liable.

The purpose of the indemnity is to return the insured party to their initial situation.

3. Service provision

4. Economic and finance activity

Premiums are collected by the insurer and are mainly used to pay indemnities.

The company redistributes the economic resources generated by the insured parties for situations of individual need.

It invests its funds to make profits, become more robust, and improve the benefits it offers to policyholders.

Insurance activity is mainly a service sector and, in turn, uses many other professional services, such as people who make repairs, doctors, lawyers, loss adjusters, drivers, managers, and so on.

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