Pension is the sum of money which is added up as a fund during the employment years of an employee for supporting the particular individual during the person’s retirement by making periodical payments from the pension fund. Insurance is a risk management system for protecting individuals from financial loss, and mostly used for compensating probable and tentative loss.
Pensions are usually misunderstood and confused with the concept of severance payment. Pensions are paid periodically as installments for after-retirement lives while severance payments are made as a fixed amount after the job is terminated involuntarily before retirement. “Retirement plan" and "Superannuation" terms stand for the pension granted by retirement of a particular person. Retirement plans are set up by;
Insurer, Insurance Carrier, Underwriter or an Insurance Company is the institution which provides insurance. The individual or an entity which purchases insurance is named as insured or policyholder. The insured makes a guaranteed payment to the insurer in return of the Insurance Institution to compensate the insured amount of loss in an uncertain situation. The particular losses are not always financial, but the insured properties should be reducible to financial means. A contract which is named as Insurance Policy is received by the insured. The Insurance Policy includes the detailed conditions and situations which makes the insured entitled to financial compensation. It is called premium if the amount of money taken by the insurer to the insured for the coverage set beyond in the insurance policy. A claim is submitted to the Claims Adjuster for processing if the policyholder has a loss which is covered by the Insurance Policy potentially. Depending on the decision given by the Claims Adjuster, the particular financial loss is repaid to the insured - or policy holder.