Insurance
Welcome to our brand-new series, A-Z of Insurance. In this series, we will venture into the world of insurance to breakdown insurance jargon for you, so you’re empowered to make informed decisions about your financial security.
Quid pro quo is a Latin phrase that means ‘something for something’. It describes a situation where there is a give and take, generally referring to two parties who have a reciprocal exchange of goods or services.
In the legal and business world, it means an agreement of mutual benefit. The concept of quid pro quo applies to insurance as well.
The insurance company offers you coverage under the insurance policy, as per the terms and conditions.
In return, you are required to pay the insurance company a fee, known as the premium.
Note: Your insurance coverage will remain in force if you pay the premium by the specified due dates.
For example: Mayank, 35 years old, decides to buy a health insurance policy. The policy will cover his medical expenses as per the terms and conditions. In return, he is required to pay a yearly fee to the insurance company.
Buying an insurance policy means entering into a contract with the insurance company. This offers benefits to both parties, in a quid pro quo manner. Here’s how it works:
