What is insurance | Types of insurance

Insurance is a type of business. And it helps expand transactions by removing barriers related to transaction risk.
insurance
insurance

What is insurance?

Insurance is a contractual institutional arrangement entered into between the insured and the insurer for the purpose of providing security to human life and property from increasing risks and covering the financial loss caused by the risk.

What is insurance premium?

In exchange for the promise of the insurer, the policyholder pays the national price called the premium.

What does insurance premium mean?

Insurance premium means the fixed amount of money that is paid to the insurance company on a monthly or yearly basis after taking the insurance.

Types of insurance
Types of insurance

What are the types of insurance?

Insurance is mainly of three types:
  • Life Insurance
  • Marine Insurance
  • Fire Insurance
In addition, there are several other types of insurance in use in each country, they are:
  • Abduction Insurance
  • Accident insurance
  • Risk insurance for workers' compensation
  • Education insurance
  • Crop insurance
  • Sky travel insurance
  • Integrity Insurance

What is life insurance?

Life insurance is a type of insurance system. Through which a person's life is insured. In this system life insurance is provided for the husband, wife, son, or daughter for a fixed sum of money. Also, if the head of the family has life insurance, he gets the full sum assured from the insurance company to compensate his nominee in case of premature death.

Life insurance
Life insurance
This saved the family from destruction. Also, if the insured person does not die during the policy period, he gets the full sum assured back to the company along with the bonus at the end of the policy period. Under the terms of life insurance, the insurer undertakes to pay the sum assured to his nominee in return for a specified premium on or before the death of the policyholder.

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In the case of life insurance, the insured must have an insurable interest in the subject matter of insurance and there must be ultimate good faith between both the insurer and the insured.  Rushing. In the case of life insurance like marine insurance or fire insurance, the insurer must return the sum assured on the death of the insured or at a specified time.

What is Marine Insurance?

During the movement of ships by sea, sea storms, inclement weather, theft, pirate attacks, etc. can damage the ship, the ship's cargo, and ship fare. And the insurance that is done for such uncertain compensation is called marine insurance. In this case, the insurer or the insurance company charters the insured's vessels, goods, and ships in return for a certain premium.

Marine Insurance
Marine Insurance
As per the insurance contract, the policyholder pays a certain premium to the insurance company. And if the subject matter of the insurance is damaged due to any special event or circumstance, the insurance company pays the said compensation. However, if there is no loss, the insurance company or the insurer has no responsibility.

In this case, all the premium received is profit. In marine insurance, there must be an insurable interest of the insured in the subject matter of insurance and ultimate good faith between both the insured and the insurer. If not then the insurance company provides the document containing the terms and conditions of the insurance contract to the policyholder.

In marine insurance contracts, this document is called a marine insurance policy. Marine insurance policies are of different types such as time insurance policy, voyage insurance policy, mixed insurance policy, etc.

What is fire insurance?

Any goods, house, or any other contents insured against fire is called fire insurance. Many times businesses and goods are burnt down as a result of the fire. Therefore, for the purpose of such possible compensation, the businessman ensures his business establishment and goods with an insurance company.
Fire insurance
Fire insurance
In this arrangement, the insurer arranges for the compensation of the insured's houses, factories, or goods if they are destroyed by fire in return for a certain premium according to the terms of the insurance contract. But there must be ultimate good faith between the insured and the insurer. 

Moreover, it is essential that the insured has an insurable interest in the subject matter of the insurance.

What is a fire insurance policy?

A fire insurance policy is a document of a fire insurance contract. Subject to the payment of the prescribed premium, the insurer insures the contents of the insurance and issues a contract of insurance to the policyholder called a fire insurance policy.

What is fire insurance collection?

For obtaining a fire insurance policy, the insurance proposer has to fill out the prescribed proposal form and submit it to the insurance company. In this form, the premium rate and amount of the insurance company are mentioned.

If the proposer is willing to insure the contents against the specified premium, the insurance company prepares the policy and sends it to the policyholder.

How many types of fire insurance issues?

Five types of fire insurance are commonly issued:
  • Single insurance policy
  • Special Insurance
  • Valid Insurance
  • Average insurance and
  • Floating Insurance

What is abduction insurance?

The insurance that the insured takes to protect against loss or damage caused by kidnapping is called kidnapping insurance.

What is accident insurance?

An insurance contract is made on the condition that the insured will be compensated in case of any damage to his property due to an accident is called accident insurance.

What is risk insurance for workers' compensation?

The employer has to pay compensation if the workers working in the factory are killed or injured in an accident. And to protect against such losses, the insurance that the employer takes out in the name of the workers is called workers' compensation insurance.

What is Education Insurance?

Instead of a fixed premium, a type of insurance called education insurance has been introduced to cover the cost of education for boys and girls.

What is crop insurance?

Crops can be destroyed due to natural calamities so the insurance taken by the farmers to protect them from such losses is called crop insurance.

What is sky travel insurance?

Air travel insurance is a type of insurance that is taken out against the premium to cover the risk of air accidents.

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What is integrity insurance?

Many times the businessman has to suffer a lot due to the dishonesty of the employees. And to spread the risk of such losses, the insurance that traders take is called integrity insurance.

Difference between life insurance and general insurance?

Difference between life insurance and general insurance:

Life Insurance

1. Content

Wealth is the primary topic of general insurance.

2. Type of contract

Life insurance is not an indemnity contract. It is only a promise of financial support.

3. Duration

Life insurance can be for the long or short term.

4. Insurable interest

Insurable interest exists first in life insurance.

5. Pay the price

The life insurance contract pays out the specified amount at specified intervals after the occurrence of specified events.

6. Damage assessment

The subject matter of life insurance is life as the financial loss of life is not quantifiable.

7. Moral hazard

The risks arising from ethical behavior in life insurance are negligible.

8. Surrender value

 Life insurance generally pays surrender value after two or three years.

9. Reinsurance

 In the case of life insurance, only once the contract is done.

General insurance
General insurance

General Insurance

1. Content

Wealth is the primary topic of general insurance.

2. Type of contract

A general insurance contract is a contract of indemnity. In this agreement, financial compensation is promised.

3. Duration

General insurance can be done in short term.

4. Insurable interest

General insurance may not have an insurable interest at the time of contracting.

5. Pay the price

General insurance provides compensation only when certain events occur and not otherwise.

6. Damage assessment

As the subject matter of general insurance is property, its financial loss can be assessed.

7. Moral hazard

 Moral hazard is high in general insurance.

8. Surrender value

Normal term insurance has no surrender value.

9. Reinsurance

In general term insurance, the insurance contract has to be done again and again there is scope for reinsurance.
insurance
insurance

FQA

What are the most common types of insurance?

The most common types of insurance are:
  • Marine Insurance
  • Fire insurance
  • Life insurance

How many parties are there to insurance?

Insurance has 2 aspects:
  • Insurers and
  • The insured

Where is the original birthplace of insurance?

A review of the commercial history of the Middle Ages shows that the original birthplace of insurance is Israeli.

What insurance does the replacement policy apply to?

A replacement policy is applicable for marine insurance and fire insurance. Because the essence of such an insurance contract is indemnity.

What is reimbursement?

There can be no consent agreement without compensation. In consideration of the insurance contract, therefore, the insured will pay the stipulated premium to the insurer.

What is the date of the insurance day?

March 1st, Sunday.

In what year was life insurance established?

May 14, 1973.

What is the amount of government insurance?

There are 2 government insurance companies in Bangladesh. Moreover, there are many private insurance companies in Bangladesh. Of the two government insurance companies, one is life and the other is non-life. 

One is called Jeevan Bima Corporation. And the name of the other is General Insurance Corporation.

Why insurance is not called charity?

Insurance is not called charity because the contract of insurance is executed in return for certain consideration.

Why is insurance not called gambling?

Insurance is not called gambling. This is because the subject matter of insurance involves the insurable interest of the insured.

When will the insurance contract be considered canceled?

If the insured conceals any information or discloses wrong information about the subject matter insured, the contract shall be deemed to be void.
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