LecturerGood morning. Insurance can seem mysterious, even unfair, until you grasp the simple idea at its heart. Today I'll walk you through how it actually works.
LecturerAt its core, insurance works by spreading risk across a very large number of people, so that a disaster for one person is shared painlessly by thousands.
LecturerHere's the mechanism. Everyone pays a little into a common fund, and we call this shared money the pool. Claims are then paid out of it.
LecturerThe regular sum that each customer pays into that fund is known as the premium. Pay it monthly or yearly, the principle is the same.
LecturerNow, when you do make a claim, the first slice of the cost that you must cover yourself is called the excess. A higher excess usually means a lower premium.
LecturerThe contract that lists exactly what is, and is not, covered is your policy. Read it carefully, because it is the final word in any dispute.
VHP English Mở app luyện nghe →