Principles of Insurance
Insurance is a cover used for protecting a person from the financial losses. Financial losses can take many forms. There are risks to our investments, liabilities for our actions, and risks to our ability to earn income. The insurer and the insured are the main two parties involved in insurance. The insurer is the insurance company which will provide the cover to the insured against any financial losses. The insured may be an individual person or a group of people like an employer, members of a society, etc. Basic categorization of Insurance There are mainly two broad categories of insurance Life insurance Non-life insurance Life insurance products include Life term policies, which give clean risk coverage of only the death benefit, whereas endowment or money back policies have a risk as well as savings compon employment law advice for employers ent i.e. death as well as maturity benefit. The life insurance also includes Unit ? Linked Policies in which there is a risk component and a savings component, which is invested in equity, debt or gilt funds, depending on the insurance company. Non Life insurance products include property or casualty, health insurance or house, fire, marine insurance etc. This insurance category deals with all the non-life aspects of an insured like their house, health, land, office, etc which might bring financial loss. There are few principles of insurance, such as: Definite Loss – Insurance – The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured on a life insurance policy.
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