What Is Insurance ?
Insurance may be a tool by that fatalities of alittle range area unit remunerated out of funds collectedfrom the insured. Insurance firms pay back for money losses arising out of occurrenceof insured events, e.g. in personal accident policy the insured event is death thanks to accident, infire policy the insured events area unit fireplace and alternative natural calamities. Hence, insurance is asafeguard against uncertainties. It provides money recompense for losses suffered due toincident of out of the blue events, insured inside the policy of insurance.Insurance, primarily, is a briefing wherever the losses experimented by some are extendedover many World Health Organization area unit exposed to similar risks. Insurance may be a protection against money lossarising on the happening of associate sudden event.An individual World Health Organization needs to hide risk pays alittle quantity of cash to a corporation calledon Insurance Company and gets insured. An insurance company insures different people bycollecting a small amount of money from each one of them and collectively this money is enoughto compensate or cover the loss that some members may suffer.The fixed amount of money paid by the insured to the insurance company regularly iscalled premium. Insurance company collects premium to provide security for thepurpose.Insurance is an agreement or a contract between the insured and the InsuranceCompany (Insurer).
TYPES OF INSURANCE
Insurance occupies an important place in the modern world because the risk, which can beinsured, have increased in number and extent owing to the growing complexity of the presentday economic system. It plays a vital role in the life of every citizen and has developed on anenormous scale leading to the evolution of many different types of insurance. In fact, now a dayalmost any risk can be made the subject matter of contract of insurance. The different types ofinsurance have come about by practice within insurance companies, and by the influence oflegislation controlling the transacting of insurance business. Broadly, insurance may beclassified into the following categories:
(1)Classification on the basis of nature of insurance
(a)Life Insurance (b)Fire Insurance (c)Marine Insurance (d)Social Insurance (e)Miscellaneous Insurance
(2)Classification from business point of view:
(a)Life Insurance (b)General Insurance
(3)Classification from risk point of view:
(a)Personal Insurance (b)Property Insurance (c)Liability Insurance (d)Fidelity Guarantee Insurance However,
in the present lesson we will discuss insurance in business point of view, personnel insurance and property insurance.