What Is Definition Of Insurance?

What is the basic definition of 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 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 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 is the purpose of this insurance?

There are at least two reasons why insurance is purchased. The first, and perhaps most important, is for protection against loss from some catastrophic event. A car accident, an illness or injury, or death can lead to serious financial consequences. Insurance helps to provide protection against these financial losses.

What are the features of insurance?

Features of InsuranceSharing of Risk. Insurance is a device to share the financial losses which might befall on an individual or his family on the happening of a specified event. … Co-operative Device. … Value of Risk. … Payment at Contingency. … Payment of Fortuitous Losses. … Amount of Payment. … A large Number of Insured Persons.

What are the two 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 are the benefits of insurance policy?

Insurance companies collect premiums up front, invest those premiums in a variety of investment vehicles, and pay claims if they occur. The last benefit of insurance is reducing social burden. Insurance helps reduce the burden of uncompensated accident victims and the uncertainty of society.

What is the important of insurance?

Insurance generates significant impact on the economy by mobilizing domestic savings. … Insurance enables to mitigate loss, financial stability and promotes trade and commerce activities those results into economic growth and development. Thus, insurance plays a crucial role in sustainable growth of an economy.

What are the main principles of insurance?

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

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.

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 insurance one word?

1 : an agreement by which a person pays a company and the company promises to pay money if the person becomes injured or dies or to pay for the value of property lost or damaged. 2 : the amount for which something is insured. 3 : the business of insuring persons or property.