Insurance is a form of risk management to protect against the uncertainty of loss in future. Insurance is one of the best means of security against financial loss and makes life much easier for the person insured. Insurance protects against financial loss in future.
An insurance can be defined as a contract between an insurance company and an individual or organization. The insurance company provides financial protection or reimbursement to the individual or entity against losses. The Insurance company is the one that provides the insurance, while the person or organization that purchases the insurance policy is known as the policyholder or insured. The premium is the amount of money that the insurance company charges from the insured.
Types of insurance policies
The types of insurance policies that are popular among people are health, auto, life insurance and property.
Health issues can affect anyone at any point of time. So, it is imperative that one purchases health insurance coverage. At the time the cost of treatment can be high but with an effective health insurance policy, the cost of medical treatment or surgical expenses are covered. The insurer has to provide a fixed amount of money or premium to the insurance company every year. In case of an emergency such as hospitalization or surgery, the insurance company reimburses the insured. In many developed nations, the state provides its citizens’ health coverage. Organizations/companies in many nations also provide their employees with health insurance as a part of their benefit.
Auto insurance protects the insurer from financial losses arising from theft or accidents. The individual has to pay a certain amount as premium and the insurance company pays the losses. The aspects that are covered in the auto insurance are the liability coverage that is a legal responsibility to the other people who have suffered injury or property damage in case of a collision. Property damage involves the damage to one’s own vehicle in an accident. It also covers the theft of the vehicle. The auto insurance also covers medical expenses for treating injuries that have resulted in the accident.
Life insurance is a very popular kind of insurance around the globe. The life insurance policy provides security to the insurer against a financial loss that may result from his or her premature death. The insurer has to name a beneficiary in the policy who would receive the insured amount after the said person’s death. This would safeguard the insurer’s loved ones from hardships. The insurer has to pay a premium every year to the insurance company, which provides the lump sum payment to the beneficiary upon that person’s death.
Property insurance provides the insurer security from the risks to his or her property. These risks include damage to the property from weather, fire, and even theft. The forms of insurance that are covered in this category are earthquake insurance, home insurance, fire insurance, flood insurance etc.
Insurance business and premiums for 2013 in leading countries is as follows:
|Rank||Country||Life Premiums||Non Life Premiums||Amount||% change from prior year||% of total world premiums|
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