Most individuals wish to have enough assets to meet present necessities and luxuries and save for the future. They also wish to leave enough assets to assure continuation of these necessities and luxuries to their dependents. However, the earning power of an individual is reduced by retirement, unforeseen disability or unexpected incidents. The surest and most easily available help towards ascertaining that these needs would be met, is insurance.
Insurance is a device which takes care of various risks. It offers a plan through which a person joins a large group of people. The group undertakes or guarantees to pay a fixed sum of money to the person (policyholder), his family, or to other beneficiaries as intended by the insured upon the happening of an uncertain specified event like death, fire, etc. In return, the policyholder pays an agreed risk payment, also called the premium to the insurance company.