What is Insurance?
If you don’t know how insurance work, insurance is all about the legal agreements between the two parties. The two parties involved are the insurer or insurance company, and the individual who is being insured.
Typically, the top insurance company often makes a promise to make good the losses of the insured on the happening of the insured contingency.
The contingency is the unforeseen event that causes a loss to the individual. It can be the death of the policyholder or damage of the property.
As the name per se, contingency is defined as uncertainty regarding the happening of an event. The insured pays a premium in return according to the promises or compensation made by the insurer.
2. How Does the Insurance Work?
Next, the insurer and the insured will get the legal contract for the insurance, which is known as the insurance policy.
For instance, if you are subscribing to insurance for a medical card in Malaysia, there are several details about the conditions and circumstances under which the insurance company. The insurance company will make the compensation for certain insurance amount to either the insured person or to nominees.
Basically, insurance is one of the methods of protecting yourself and your family from financial loss. Therefore, the premium for a big insurance cover like an insurance investment plan is much lesser in terms of money paid.
Any individual or company could seek insurance from an insurance company. However, the decision to provide insurance is at the discretion of the insurance company.
3. Types of Insurance
There are several categories of insurance. So, let’s check the most common types of insurance. Check out Allianz’s website for more information.
Health insurance served as the purpose to help you cover the medical costs for the expensive treatments. There are different types of health insurance policies that included various kinds of critical diseases and ailments.
You could purchase the critical illness insurance policy and insurance for specific diseases such as cancer. Most of the premium paid of health insurance policy do cover the treatments, medication cost as well as hospitalization.
Nowadays, motor insurance in Malaysia has become essential for every vehicle owner. This is because you need some insurance protection against any unforeseen incidents such as road accidents.
Besides, some of the policies do provide compensation for the damage done of your car due to natural calamities such as earthquakes or floods.
Everyone is dreaming of owning their own home sweet home. Thus, home insurance could be another way of helping you to cope with damage or loss caused to your house due to perils or other natural calamities.
In addition, you can take more safety precautions by subscribing to more house insurance for your home that covers perils such as floods, earthquakes or lighting.
4. What Are the Tax Benefits on Insurance?
Apart from the security and safety of subscribing insurance, there are various income tax benefits that you could avail of.
- The indemnity insurance premium up to RM 10,000 can be claimed as a tax-saving deduction.
- The family medical insurance premium up to RM 5000 for a whole family can be claimed as tax-saving deduction as well.
Be it oversea travel insurance, general insurance or health insurance; you could purchase the insurance policy online or offline. The most important things are you need to do detailed research before investing in the insurance policy.