Not only some area of human life, are all the areas of human life full of risks and uncertainties. Death, accident and natural calamity can come at any time. Man is unable to stop these tragic incidents, but the means of reducing the intensity of these saddened incidents has been discovered.
You know that there are too many risks in the business. For example – employees may be injured during work, goods can be lost in the way, warehouse may be caught in fire, etc. But today, the entire risk to the owner is not to be borne.
Insurance business provides protection from these risks. In other words, it helps in business, because of the loss of losses in business activities; the insurance company compensates them with full or part of it.
What Is The Meaning Of Insurance?
Insurance is a contract between two parties, in which one is insured and another is insured. The insurer agrees to compensate for the loss or damage caused by the occurrence of certain events in exchange for a certain amount, which is called premium, the contract. This document is called insurance policy.
Hence the definition of insurance can be:
This is a contract between the insurer and the insured, according to which the insurer, instead of a fixed amount (premium), will get a certain amount of time on the occurrence of a certain event (a certain age or death) to donate or promise to fulfill the actual loss due to the loss due to the risk that is insured.
How Many Types Of Insurance Available?
Insurance can be classified as follows on the subject matter or nature of insurance.
- Life Insurance
- Fire Insurance
- Marine Insurance
- Other types of insurance
Large amount of money is required to get married to their children or to get higher education. Life insurance can protect us from these conditions of the future. In this, the insurer pledges to give a certain amount of death or the end of a certain period of the life assured.
In return, the insurer (insurer) takes a fixed premium amount in installments. Now, because of the insured peril, it is sure to happen. Therefore, the insured person is also sure to get the sum insured late.
Fire insurance is provided to get protection from fire damage. Fire insurance is a contract in which the insurer promises to pay the amount of fire loss or compensation in return for the premium. Fire insurance is usually done for one year. It can also be renewed every year.
Fire loss is done only after completion of two conditions.
- The fire is actually engaged, and
- The fire is not deliberately taken but rather accidentally. The reason of the fire does not matter here.
Today the maritime trade has increased a lot, as well as its risks have increased. Marine Insurance is an agreement in which the insurance company gives assurance of the fulfillment of the loss due to the risk of a ship or merchandise during a good journey.
Other Types Of Insurance
General insurance companies insure the insurance of other risks, some of which are brief details of the insurance policies are as follows:
- Peacock vehicle insurance
- Health insurance
- Crop Insurance
- Cash Insurance
- Insurance of animals
- Insurance of theft from theft
- Insurance of Reliability
What Are The Principles Of Insurance?
The insurance contract of all these depends on some established principles. A brief description of this is given below-
- Theory of liberated Selfishness
- Principle of Indemnity
- Principle of Contribution
- Substitution Theory
- Principle of Reducing Damage
- Principle of the Closest Reason for Loss
Principle Of Complete Faith – Insurance contract is a mutual trust contract. Both insurers and insured parties should highlight all the necessary information related to the subject matter of insurance.
Principle Of Liberal Self-Interest – According to this principle, the insured should have an interest in the subject matter of insurance. An insurable interest means the self-interest of financial or profit in the subject matter of insurance.
Principle Of Indemnity- Indemnification means that to fulfill a person’s actual loss or to bring it back to life before insuring it. This principle applies in marine insurance, fire insurance and general insurance.
Principle Of Substitution – According to this principle, if the claim of the insured is settled then the insurer gets the subject matter of the subject matter of the insurance.
Principle of reducing Damage – In case of an accident, the insured should take all necessary steps to reduce the loss or damage to the subject matter of insurance. This principle ensures that after insured insurance policy does not become insufficient to safeguard the security of the object being insured.
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