The complexity of the terminology of the insurance sector requires explaining everyday concepts that we have surely heard on more than one occasion but that we do not know exactly what they refer to. The policy concept is undoubtedly one of them and that it is nothing more than the insurance contract made between an insurance company and an individual, whether a natural or legal person, who is called the policyholder. Policies can be structured in three parts:
- General conditions: They are the set of written clauses that appear in the policy. They regulate the rights and obligations of the parties. Insurance companies include these clauses in the insurance contract, being the same for all policies of the same modality.
- The particular conditions: are the individual conditions of each policy. They specify: risk, guarantees, amount of the premium and frequency of payment, insured capital, franchises, etc.
- Appendices or supplements: take place when the contract is modified or temporarily suspended. These become part of the policy. They must be signed by the same person who signed the policy. Thus, a supplement will be issued, for example, when the insured capital increases or decreases, or the policyholder changes his habitual residence, etc.
A policy must include all the agreements and conditions that will govern the relationship between the parties and will collect the rights and obligations of the parties. To be valid, the policy must be signed by both parties and a copy must be delivered to the policyholder.