Quick Answer: What Is Insurance And Its Features?

What is insurance and its types?

Insurance is a legal agreement between two parties i.e.

the insurance company (insurer) and the individual (insured).

In this, the insurance company promises to make good the losses of the insured on happening of the insured contingency.

The insured pays a premium in return for the promise made by the insurer..

What are the 4 types of insurance?

Different Types of General InsuranceHome Insurance. As the home is a valuable possession, it is important to secure your home with a proper home insurance policy. … Motor Insurance. Motor insurance provides coverage for your vehicle against damage, accidents, vandalism, theft, etc. … Travel Insurance. … Health Insurance.

What are the objectives of insurance?

The objective of insurance is to financially guard against unpredictable life occurrences. In short, when you buy an insurance policy, you make monthly payments, called premiums, to purchase protection from monetary repercussions related to things like accidents, illness or even death.

What are the types of insurance?

Broadly, there are 8 types of insurance, namely:Life Insurance.Motor insurance.Health insurance.Travel insurance.Property insurance.Mobile insurance.Cycle insurance.Bite-size insurance.

What is life insurance in simple words?

Life Insurance is defined as a contract between the policy holder and the insurance company, where the life insurance company pays a specific sum to the insured individual’s family upon his death. The life insurance sum is paid in exchange for a specific amount of premium.

What is insurance and its characteristics?

Insurance is cooperative device of sharing the burden of risk. of one on the shoulders of many. All the insured contribute the premium out of which the person who actually suffers loss is compensated or is paid up, insurance is a device to share the financial loss of few among many others.

What is meant by insurance?

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.

What are the main principles of insurance?

Principles of InsuranceUtmost Good Faith.Proximate Cause.Insurable Interest.Indemnity.Subrogation.Contribution.Loss Minimization.

Which type of insurance is best?

Term Life Insurance Plans Term insurance is the purest and most affordable form of life insurance in which, you can opt for a high life cover for a specific period.

What is the main benefit of insurance?

The obvious and most important benefit of insurance is the payment of losses. An insurance policy is a contract used to indemnify individuals and organizations for covered losses. The second benefit of insurance is managing cash flow uncertainty. Insurance provides payment for covered losses when they occur.

What are the 7 types of insurance?

7 Types of InsuranceLife Insurance or Personal Insurance.Property Insurance.Marine Insurance.Fire Insurance.Liability Insurance.Guarantee Insurance.Social Insurance.

What is the premium for insurance?

A premium is the amount of money charged by your insurance company for the plan you’ve chosen. It is usually paid on a monthly basis, but can be billed a number of ways. You must pay your premium to keep your coverage active, regardless of whether you use it or not.

What is insurance and its functions?

So, insurance functions are; The system to spread the risk over several persons who are insured against the risk; The principle to share the loss of each member of the society based on the probability of loss to their risk; and. The method to provide security against losses to the insured.

What is insurance simple words?

Insurance is a term in law and economics. It is something people buy to protect themselves from losing money. … In exchange for this, if something bad happens to the person or thing that is insured, the company that sold the insurance will pay the money back.