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Functions and Types of Insurance

Insurance provides certainty of payments for risks of loss by sharing losses from uncertain events across individuals exposed to the same risks. It serves functions of providing protection from losses, sharing risks, and generating capital through investment of accumulated funds. There are two main types of insurance - life insurance and general insurance. Life insurance provides payment of the insured sum upon death or maturity of the contract, while general insurance provides payments depending on losses from specified financial events like health issues, accidents, fire damage, or business interruptions.

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145 views14 pages

Functions and Types of Insurance

Insurance provides certainty of payments for risks of loss by sharing losses from uncertain events across individuals exposed to the same risks. It serves functions of providing protection from losses, sharing risks, and generating capital through investment of accumulated funds. There are two main types of insurance - life insurance and general insurance. Life insurance provides payment of the insured sum upon death or maturity of the contract, while general insurance provides payments depending on losses from specified financial events like health issues, accidents, fire damage, or business interruptions.

Uploaded by

loveleesh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Insurance is thus a device by which the loss likely to be caused by an uncertain event

Functions of Insurance Provides Providing Insurance certainty of payments for the risk of loss.
Certainty
Protection Risk Sharing Capital Formation
The Second main function of insurance is to provide protection from probable chances of loss. On the happening of a risk event, the loss of shared of all the persons expose to it. The accumulated funds of the insurer are invested in various income generating schemes.

TYPE OF INSURANCE

INSURANCE
LIFE GENERAL INSURANCE INSURANCE

LIFE INSURANCE
Life insurance is a written contract between the insured and the insurer, that provides for the payment of the insured sum on the date of the maturity of the contract or on the unfortunate death of the insured, whichever occurs earlier.

GENERAL INSURANCE

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance.

TYPES OF GENERAL INSURANCE


Health insurance Business insurance Automobile insurance Fire insurance etc.

HEALTH INSURANCE
Just like one looks to safeguard ones wealth, these policies ensure guarding the insurer's health against any calamities that may cause long term harm to ones life and even hamper ones earning ability for a lifetime. Some examples of this type of policy are mediclaim policy, personal accident, group accident, traffic accident, etc.

Business Insurance
Risks of loss of profits/business, goods, plant and machinery are most profound in case of business. Under this head they cover the most widely used policies that cover a business from any loss of the above kind. Some of these policies are burglary insurance, shopkeepers insurance, key-man insurance, marine insurance, public liability insurance, workmen compensation insurance, air transit insurance, fidelity guarantee insurance etc.

Automobile Insurance

Auto Policy is required to be taken to cover the risks that arise to the owner, vehicle and third party. This includes the Compulsory Vehicle Policy (In India, by the Motor Vehicles Act, every car owner is required to covered against Act risks) and the Comprehensive Vehicle Policy.

FIRE INSURANCE
This policy is required to be taken to prevent any loss of profits / property from incidental fire. Eg: fire insurance and fire consequential loss policy.

Working of insurance

Insurance Benifts

THANK YOU

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