In very simple terms, the insurance policy is a contract between the insurer and the insured (also known as ‘Policy holder’), that determines the claim that the insurer is legally compelled to pay the insured. Every insurance policy has tenure, throughout which the policy holder needs to pay a monthly amount, known as premium and the insurer promises to pay in cases of loss caused by the perils, as mentioned under the policy terms.
There are several kinds of insurance policies- health insurance, home, insurance, auto insurance, life insurance, medical insurance to name a few. The insurance contracts are specifically designed to meet the tailored needs, therefore the features of the insurance policies are quite distinct. The insurance policies are considered to be the standard forms, therefore they feature boilerplate language, which is same in most of the insurance policies, irrespective of the nature of the insurance.
Discussing an insurance policy, it is important to mention that most of the insurance policies are generally an integrated contract, which means that it includes all the associated forms with the agreement between the insured and the insurer. In some of the rare cases, the supplementary letters are sent to the insured after the final agreement is signed by the policy holder, but that happens only in case of non-integrated contracts. In cases of insurance Oral agreements are not considered as a part of the policy, therefore for the insured, it is very important to read the policy terms quite carefully before signing. Advertising materials are not a part of the policy.