The exchange for collecting a premium (insurance

The insurances are contracts through which, in exchange for collecting a premium (insurance price), the insurer undertakes, in case of a loss covered by a said contract, to compensate the damage produced or to satisfy a capital, income or another agreed service.TerminologyIn the world of insurance, the unique language is used. To understand the characteristics and operation of these products, we must first understand the meaning given to the following words:Persons involved•    The insurer: It’s the insurance company. In exchange for collecting a premium, it assumes the obligation to compensate the insured or beneficiary for a certain amount of money, if a particular event (contingency) occurs.•    The policyholder: The person or company that contracts the insurance and pays the premium.•    The insured: Is the person exposed to the risk covered by the insurance contract. The risk may fall on the person of the insured person, on the assets that he possesses an economic interest or on his globally considered assets•    The beneficiary: Is the person or company that has the right to receive the consideration agreed to the contract.The policyholder, insured and beneficiary could be the same person or different people.Other terms•    Policy: this is the document in which the insurance contract is signed. It contains the regulation of it and consists of general, special and unique conditions.•    Premium: the price of insurance•    Sum insured: it is the amount fixed in each of the coverages agreed and constitutes the maximum compensation limit to be paid by the insurer, in the event of the contingency or loss.•    Emergency / Loss: the event foreseen in the policy and that gives rise to the fulfillment of the obligations of the insurer. The production of the contingency or loss gives rise to the compensation agreed. (Examples of emergencies: death, illness, fire, accident, etc.)Life insurancesLife insurance is contracted to alleviate the unfavorable economic impact that circumstances that affect the life of a person can produce. For example, a person can subscribe to life insurance so that, if he dies, his children will not have financial problems; or a worker accepts to retirement insurance so that when he retires his total income will not decrease. There are three basic types:•    Coverage for survival case: in exchange for the collection of a premium the insurer is obliged to pay a certain amount (insured sum) if the covered lives on the date set in the contract.•    Insurance in case of death: in exchange for the collection of a premium, the insurer is obliged, in case of death of the insured, to pay the beneficiary a certain amount (sum insured).•    Mixed insurances: they combine, in a single contract, a benefit for death and another case for survival.Among the variables with the most significant influence on the price of the insurance (premium) can be cited the age, the state of health of the insured and his profession. The people who represent the most significant risk, such as people who smoke, those who have dangerous jobs or those who practice risky sports, pay premiums that are higher than the average.When a person contracts life insurance, the insurer in the initial moment must perform a risk assessment, which usually consists of subjecting the person who hires the coverage to a questionnaire about their health. Regarding the answers to this survey, it is essential to highlight the importance of what is stated in it, since if it is inaccurately answered or data is omitted, the insurer, in the event of the contingency, may even be exempted from paying the benefit if he mediated fraud or severe fault in the statement. Also, on some occasions, the insurer requires the performance of a medical examination before the signing of the insurance contract.