Features, Types, and Importance of Insurance

By 3 years ago

Insurance today has become an integral part of everyone’s life. It is a written contract of insurance that provides protection against future losses. Life insurance usually helps people to get life insurance. The insured gets a certain compensation from the insurer. Non-life insurance provides financial support to people or companies and helps them deal with losses. The basic human properties have to be contrary to the idea of taking the risk. Do you study to learn: If Yes? Then read the lot. Let’s Study: Features, Types, and Importance of Insurance. Read this in the Hindi language: बीमा की विशेषताएं, प्रकार, और महत्व…।

The concept of Insurance Discussing the topic: Features, Types, and Significance or Importance of Insurance.

Always insist on reducing risk and providing protection against potential failure. Risk includes fire, see danger, death, accidents, and theft. Any risk can insure on the premiums corresponding to premiums including in the risk. Thus the collective impact of risk is insurance which provides reasonable security and assurance that the assured will protect in the event of any type of disaster or failure. Before this study, once read this article: Meaning, Definition, Principles, and Functions of Insurance.

Features of Insurance:

With the above explanation, we can find these following characteristics, which are generally celebrating in the case of life, sea, fire, and general insurance.

A large number of insured persons:

To spread the damage easily and easily, a large number of individuals should be insured. A small number of individuals can also be co-operative insurance, but it is limit to a small area. The cost of insurance for each member can be high. So, it can be impossible. Therefore, to make the insurance cheaper, it is important to ensure a large number of individuals or property because the cost of the insurance company will be the cost and therefore, the lower premiums will be.

Sharing risks:

Insurance is an event that is a person to share a financial event that may occur when a specific incident occurs on a person or his family. This event may be the death of a breadwinner for the family in case of life insurance, marine insurance in the fire, fire in fire insurance and other events in general insurance, for example, theft in theft insurance, accident in motor insurance, And so on. The loss arising from these incidents, if the insured person is sharing by all insured persons in the form of premium.

Price of Risk:

The amount of the insured’s share, the risk is evaluated before considering the idea, consideration or the premium. There are several ways to evaluate risks. If the higher loss is expected, then a higher premium can be charged. Therefore, the probability of loss is calculated at the time of insurance.

Cooperative Equipment:

The most important feature of each insurance plan is the cooperation of a large number of individuals who in reality agree to share the financial loss arising from any particular risk of the insured. This group of individuals can be brought through voluntary or publicity or through the request of agents. An insurer will be unable to fill all the losses due to its loss. Therefore, by ensuring or underwriting a large number of persons, he is able to pay the amount of loss. Like all cooperative pieces of equipment, there is no obligation on anyone to buy an insurance policy.

Payment on contingency:

Payment is made on a certain casualty insured. If contingency happens then payment is made. Since the life insurance contract is the contract of certainty, because the termination, death or expiry of the term will definitely be, payment is definitely fixed. In other insurance contracts, contingency is fire or marine hazard etc., may or may not be. Therefore, if contingency happens, payment is made, otherwise, no amount is given to the policyholder. Similarly, in certain types of policies, payment is not guaranteed due to the uncertainty of any particular contingency within a particular period. For example, in term-insurance, payments are made only when the death of the assured is within the specified period, maybe one or two years. Similarly, pure endowment payments are done only in the existence of the insured at the end of the term.

Payment of forty loss:

Another feature of insurance is the cordial loss of payments. An amicable loss is that which is unpredictable and unpredictable and as a result of opportunity. In other words, the loss should be casual. The law of a large number is based on the assumption that the losses are casual and occur randomly. For example, a person can slip on the snowy path and break a leg. The loss will be lucky. The insurance policy does not deliberately cover issues.

Amount of Payment:

The amount of payment depends on the value of the loss due to special insured exposure, provided the insurance is up to that amount. In life insurance, the objective is not good to face financial loss. The insurer promises to pay a fixed amount upon the occurrence of an event. If event or accident occurs, the payment fails if the policy is valid and applies at the time of the incident, such as property insurance, the dependents will not need to prove the loss of loss and the amount of loss. It is infinite in life insurance What was the amount of loss at the time of contingency. But in the property and general insurance, the amount of loss, as well as the event of loss, is required to prove.

Types of Insurance:

The following types are given below:

Life Insurance:

Life insurance is different from other insurance, in that sense, the subject matter of insurance is the life of a human. The insurer will pay a certain amount of insurance at the time of death or at the end of a fixed term. At present, life insurance enjoys the maximum scope, because life is the most important asset of a person.

“Life insurance is a contract under which the insurance company – in consideration of a premium paid in lump sum or periodical installments undertakes to pay a pre-fixed sum of money on the death of the insured or on his attaining a certain age, whichever is earlier.”

Everyone needs insurance. This insurance provides protection to the family prematurely or provides adequate amounts in old age when reducing the capacity. Under Personal Insurance, the payment is made in the accident. Insurance is not only security but it is a type of investment because a certain amount can return the assured to the end of death or term.

General Insurance:

General insurance includes property insurance, liability insurance, and other forms of insurance. Fire and marine insurance are strictly called property insurance. Motor, theft, loyalty and machine insurance involve a certain extent of liability insurance. The strict form of liability insurance is fidelity insurance, from which the insurer compensates the insured for losses when he is subject to payment liability to the third party.

Property Insurance:

Under the property, the insured property of the person/person is insured against a certain specified risk. Risk can damage property in fire or marine hazard, property theft or accident. Property of any person and society is insured against the loss of insurance and marine hazards, the unexpected decline in the crop reduction, the unexpected death of the animals engaged in the trade, the destruction of the machines and property theft is insured and goods.

Marine Insurance:

The Marine insurance provides protection against the loss of sea threats. In threats are confronting with a rock, or ship, enemies, fire, and captured by the pirate etc. There is no reason for ship, goods and freight traffic and disappearances in these hazards. So, marine insurance ship (plow), goods and freight.

“A contract of marine insurance is a contract under which the insurance company undertakes to indemnify the insured against losses which are incidental to the marine adventure.”

Earlier only some minor risks were insured, but now the scope of marine insurance was divided into two parts; Ocean marine insurance and inland marine insurance. The former only ensures the sea threats, while later the insured perils are included which can produce by the insured’s well-known delivery of the cargo (gods) and can increase the cargo by the buyer (importer) Go down

Fire Insurance:

Fire insurance involves the risk of fire. In the absence of fire insurance, fire waste will not only increase the person but also the society. With the help of fire insurance, damages caused by fire are compensated and society is not much lost. The person is given prioritization of such loss and his property or business or industry will remain in the same condition in which it was before the loss. Fire insurance does not only protect the loss, but it also provides some resulting loss, under this insurance war risk, upheaval, riots etc. can also insure.

“Fire insurance is a contract, under which the insurance company, in consideration of a premium payable by the insured, agrees to indemnify the assured for the loss or damage to the property insured against fire, during a specified period of time and up to an agreed amount.”

Liability insurance:

General insurance also includes liability insurance, from which the insured is liable to pay the loss of property or to compensate for the loss of personality; Injury or death is seen as insurance fidelity insurance, automobile insurance, and machine insurance etc.

Social insurance:

Social insurance is to provide security to the weaker sections of the society who are unable to pay the premium for adequate insurance. Pension schemes, disability benefits, unemployment benefits, sickness insurance, and industrial insurance are different forms of social insurance. Insurance can classify into four categories from the risk point.

Personal Insurance:

Personal insurance includes insurance of human life which can cause damage due to death, accident, and illness. Therefore, individual insurance is further classifying by life insurance, personal accident insurance, and health insurance.

Guaranteed Insurance:

Guarantee insurance includes losses caused by dishonesty, disappearance, and employee or other party’s loyalty. The party must be a party to the contract. Their failure damages the first party. For example, in export insurance, the insurer will compensate the importer on the failure to pay the amount of loan.

Miscellaneous insurance:

Property, goods, machines, furniture, automobiles, valuable articles etc. maybe insure against damage or destruction due to accident or disappearance due to theft. There are different forms of insurance for each type of property, which not only provides property insurance but also liability insurance and personal injury is also insurers.

Other forms of insurance:

In addition to property and liability insurance, there is other insurance which is including in general insurance. Examples of such insurance are export-credit insurance, state employee insurance so that the insurer guarantees to pay a certain amount on certain events.

The Importance and significance of Insurance:

The process of insurance has developing to protect the interests of people with uncertainty by providing certainty of payment on any contingency. Insurance not only serves the ends of special groups of individuals, or individuals, it also transmits and transforms our modern social order.

Here the role and importance of insurance have been discussed with the point of view of insurance, insurance, and society.

Importance of Insurance to Individuals:

  • Insurance provides safety and security.
  • Also provides peace of mind.
  • Protects the mortgaged property.
  • They eliminate dependence.
  • Life-insurance encourages saving, and.
  • Life insurance provides profitable investment.

Importance of Insurance to Business:

  • Business efficiency is increasing with insurance.
  • Enhancement of Credit.
  • Business continuation, and.
  • The welfare of the Employee.

Importance of Insurance to Society:

  • The wealth of society is protecting, and.
  • Economic Growth of the country.

The significance of Insurance:

We can highlight the significance of insurance, in terms of the following advantages offered by it:

  • Concentration on Business Issues: Insurance help businessmen to concentrate their attention on business issues, as their risks are undertaken by the insurance company. Insurance gives them peace of mind. Thus due to insurance, business efficiency increases.
  • Better Utilization of Capital: Businessmen, in the absence of insurance, will maintain funds for meeting future contingencies. Insurance does away with this need to maintain contingency funds by them. Thus businessmen can better utilize their funds for business purposes.
  • Promotion of Foreign Trade: There are many risks in foreign trade much more than involved in the home trade. Insurance of risks involved in foreign trade gives a boost to its volume, which is a healthy feature of economic development.
  • The feeling of Security to Dependents: Life insurance provides a feeling of economic security to the dependents of the insured, on whose life insurance is affected.
  • Social Welfare: Life insurance also provides for policies in respect of education of children, the marriage of children etc. Such special policies provide a sense of security for the poor who take these policies. Thus life insurance is a device for ensuring social welfare.
  • Speeding Up the Process of Economic Development: Insurance companies mobilize the savings of the community through the collection of premiums and invest these savings in productive channels. This process speeds up economic development. Huge funds at the disposal of LIC (Life Insurance Corporation) available for investment purposes support the above-mentioned point of advantage of insurance.
  • Generation of Employment Opportunities: Insurance companies provide a lot of employment in the economy. This is due to the ever growing business done by insurance companies. Read this in the Hindi language: बीमा की विशेषताएं, प्रकार, और महत्व…।

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Nageshwar Das

Nageshwar Das, BBA graduation with Finance and Marketing specialization, and CEO, Web Developer, & Admin in www.ilearnlot.com.