Insurance Definition: what is the meaning of insurance an arrangement by which a company or the state undertakes to provide a guarantee of compensation for speech weight loss damage illness or death in return for payment of a specified premium now let’s see?
Types of insurance
There are two types of insurance
- life insurance
- General insurance
The difference between life insurance and general insurance
Life insurance is an insurance contract with covers the life risk of the person insured whereas the general insurance is anything which is not covered under life insurance like motor house health etched are general insurance life insurance is a form of investment whereas general insurance is only a contract of indemnity life insurance is for short or long term whereas general insurance is short term for say for two months one year or three years in life insurance premium has to be paid over the year however in general insurance premium has to be paid on lump sum a life insurance amount is paid either on the occurrence on of the event or on maturity .
whereas in the journal insurance losses reimbursed or liability will be repaid on the occurrence of uncertain events in life insurance must be present the insurable interest must be present at the time of contract whereas in general insurance the interest must be present at the time of her contract as well as at the time of loss and the last day’s policy value life insurance it can be done for any value based on the premium policy whereas into general insurance the amount payable under the life inch under the insurance contract is to the actual loss suffered so the maximum amount you get is the loss happened now
Types of life insurance
- First is term insurance it is the pure insurance form it pays your nominee it is sum insured in case of your demise within the policy term it does not have any sum assured or maturity amount premium is very low.
2. Second is endowment plan these plans are these are insurance and investment plana certain portion of the Insurance Definition premium is paid for protection of the life and rest amount is invested in law risk that is so at the time of maturity the insured person gets a predefined amount
3. Third is Julie unit licked insurance plans these are newly introduced plans a couple of decades ago they were launched you lives offer life protection as well as the opportunity for capital appreciation by investing in various funds of varying degree of risks just like endowment policy in your lives a certain portion of the premium cause in providing life cover they generally invest in equity market therefore the return is not predefined it depends on the market return it has certain lock-in period say three years or five year up to that time you cannot withdraw the insurance
Types of general insurance
- The first and the important is health insurance a general health insurance plan is an indemnity plan that pays for hospitalization expenses up to the summit short while you can avail a standalone health policy family flow to plan provide coverage to all the members of your family.
- The next is motor insurance motor insurance covers your vehicle against accident damage theft vandalism and so on the form of insurance comes in two forms comprehensive and third-party completes you covers 360 degree of your car when a third party gives you protection from third party damages happen to do to your vehicle then the home insurance our home insurance policy protects your home and it its belongings from the damage suffered due to man-made or natural disasters some home instances.
- insurance policies also provide coverage for temporary living expenses in case you are leaving your rent due to your home, Insurance Definition undergoing the renovation then one other important insurance general insurance policy is the travel insurance policy a travel insurance policy see you against losses suffered due to loss of damage Bewitch delays in flights and trips cancellation when you are travelling abroad in some cases if you are hospitalized while traveling our travel insurance may also offer cashless hospitalization to subscribe our channel please click on subscribe button and to receive regular notification from our videos do not forget to click on develop.
Principles of insurance
- Principle of utmost good faith according to this principle the insurance contract must be signed by both parties that is insurer and insure din an absolute good faith or belief or trust they should not hide anything from each other than
- Principle of insurable interest the principle of insurable interest states that the person getting insured must-have insurable interest in the object of insurance that means you cannot get the insurance policy for the neighbor’s carol for the neighbor’s kid you shall have the insurable interest in the in the property or the person where you are invested taking the insurance plan
- The third insurance principle is principle of indemnity according to the principle of indemnity an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties that means that the role of the insurer is to provide the good to the loss happened the next principle number.
- Fours principle of contribution it applies to all contracts of indemnity if the insured has taken out more than one policy on the same subject matter according to this principle the insured can claim the compensation only to the extent of actual loss either from all insurer or from any one insurer if one insurer pays full compensation then that insurer can claim protection proportionate claim from other insurers so if your car has 100,000 Insurance Definition rupees of principle indemnity then you can take maximum up to that amount
- The next principle is principle of subrogation according to the principle of subrogation when the insured is compensated for the losses due to damage to thee to his insured property then the ownership rights of such property shift you to the insurer principle number
- Six is principle of loss minimization according to the principle of loss minimization insured must always try his best to minimize the loss of his insured property in case of certain events like a fire breakout or blast etcetera you shall call the insured person shall call the police or the fire brigade and he should put all his efforts to minimize the loss to the product or the property
- The next and the last principle is principle of Cosa Proxima or near Est cause proximate cause is concerned with how the actual prints loss or damage happened to insured party and whether it is a result of an insured peril it looks for what is the reason behind the losses that he is an insured peril or not now.