Question

Insurance is a kind of protection against financial losses. The Life Insurance Corporation of India (LIC) mainly looks after the insurance of a person’s life. It also has policies like new children’s money back policy, health plans and pension plans.

In this context, answer the following question:

What is the difference between ‘insured’ and ‘insurer’?

Answer 1

• Insured: The person (or entity) who buys the protection, i.e., the one whose life, health, property, etc. is covered and who can make a claim if a covered loss happens.
• Insurer: The company or organisation that issues the insurance policy, accepts the premiums and agrees to pay benefits for covered losses.