Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification – Hello Friends Welcome to Studydhaba.com . here we are providing you A Detail Overview of Insurance, Different Types of Insurance, Classification Of Insurance and Scope of Insurance .

Insurance is a very important Topic MBA, Bcom,Mcom and Other Finance Related Degrees. We also Study Insurance for Competitive Exams .

All too often we hear about various types of insurance policies without really understanding what they are and more importantly, what they protect. The truth is, there are two main types of insurance, namely life insurance and general insurance which covers different aspects in your life.

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What is Insurance ?classification of insurance pdf

Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

Definition: A financial risk management tool in which the insured transfers a risk of potential financial loss to the insurance company that mitigates it in exchange for monetary compensation known as the premium.

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Description: Insurance policies, a contract between the policyholder and the insurance company, are of different types depending on the risk they mitigate. Broad categories include life, health, motor, travel, home, rural, commercial and business insurance.

Which Agency regulate insurance Sector In india

Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

The Insurance Regulatory and Development Authority, an agency of the Government of India, is the regulatory body for the insurance sector’s supervision and development in India.

Insurance -Types Of Insurance, Scope Of Insurance ,Classification

Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

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  1. Life Insurance
  2. Health Insurance
  3. Home insurance
  4. Property Insurance
  5. Auto Insurance

Classification from business point of view  – Life Insurance And general Insurance 

Insurance -Types Of Insurance, Scope Of Insurance ,Classification

Life Insurance General Insurance 
  • Life insurance is an insurance coverage that pays out a certain amount of money to the insured or their specified beneficiaries upon a certain event such as death of the individual who is insured.
  • This protection is also offered in a Family takaful plan, a Shariah-based approach to protecting you and your family.
  • The coverage period for life insurance is usually more than a year. So this requires periodic premium payments, either monthly, quarterly or annually.
  • General insurance is basically an insurance policy that protects you against losses and damages other than those covered by life insurance.
  • For more comprehensive coverage, it is vital for you to know about the risks covered to ensure that you and your family are protected from unforeseen losses.
  • The coverage period for most general insurance policies and plans is usually one year, whereby premiums are normally paid on a one-time basis.
The risks that are covered by life insurance are:

  • Premature death
  • Income during retirement
  • Illness
The risks that are covered by general insurance are:

  • Property loss, for example, stolen car or burnt house
  • Liability arising from damage caused by yourself to a third party
  • Accidental death or injury
The main products of life insurance include:

  • Whole life
  • Endowment
  • Term
  • Investment-linked
  • Life annuity plan
  • Medical and health
The main products of general insurance includes:

  • Motor insurance
  • Fire/ House owners/ Householders insurance
  • Personal accident insurance
  • Medical and health insurance
  • Travel insurance

 

On The Basis of nature of business, insurance may be the following types :

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Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification of Various Types of Insurance In India

  1. Life Insurance
  2. Fire Insurance
  3. Marine Insurance
  4. Social Insurance, and
  5. Miscellaneous Insurance

1-Life Insurance – Details of Life Insurance – Already Explained Above In Table .

2-Fire Insurance :

  • A fire insurance is a contract to indemnity the insured for distribution of or damage to property caused by fire.
  • The insurer undertakes to pay the amount of the insured loss subject to the maximum amount stated in the policy.
  • Fire insurance is essentially a contract of indemnity, not against accident, but against loss caused by accident.
  • It is becoming very common in fire insurance policies to insert a condition, called the average clause, by which the insured is called upon to bear a portion of the loss himself.
  • The main object of this clause is to check under-insurance and to encourages for full insurance.
  • It impress upon the property-owner for the need of having his property accurately valued before insurance.

3-Marine Insurance :

  • A contract of marine insurance is an agreement whereby the insurer undertakes to indemnity the assured in a manner and to the extent thereby agreed, against marine losses, that is, the losses incidental to marine adventure.
  • There is a marine adventure when any insurable property is exposed to marine perils.
  • Marine perils also known as perils of the seas, means the perils consequent on, or incidental to, the navigation of the sea or the perils of the seas, such as fire, war perils, pirates, robbers, thieves; captures, jettisons, barratry and any other perils which are either of the like kind or may be designed by the policy.

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4-Social Insurance :

Social insurance has been developed to provide economic security to weaker sections of the society who are unable to pay the premium for adequate insurance. The following types of insurance can be included in social insurance

  1. Sickness Insurance : In this type of insurance medical benefits, medicines and reimbursement of pay during the sickness period, etc. are given to the insured person who fell sick.
  2. Death Insurance : Economic assistance is provided to dependants of the assured in case of death during employment. The employer can transfer his such liability by getting insurance policy against employees.
  3. Disability Insurance : There is provision for compensation in case of total or partial disability suffered by factory employees due to accident while working in factories. According to Employees Compensation Act, the responsibility to pay compensation is vest with the employer. But the employer transfers his liability on the insurer by taking group insurance policy.
  4. Unemployment Insurance : In case insured person becomes unemployed due certain specific reasons, he is given economic support till he gets employment. Now Days We know how unemployment Increasing Day by Day all Over World . In india Unemployed Youth population Increasing .
  5. Old-age Insurance : In this category of insurance, the insured or his dependents is paid, after certain age, economic assistance.

5. Miscellaneous Insurance :Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

The process of fast development in the society gave rise to a number of risk or hazards. To provide security against such hazards, many other types of insurance also have been developed.

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The important among them are : Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

  1. Vehicle insurance on buses, cars, trucks, motorcycles, etc. and made compulsory so that the losses due to accidents can be claimed from the insurance company. : 14 :
  2. Personal accident insurance by paying an annual premium . In case of accidental death or total/partial disability, a fixed amount as per conditions of insurance, is paid to the insured.
  3. Burglary insurance — (against theft, decoity etc.)
  4. Legal liability insurance (insurance whereby the assured is liable to pay the damages to property or to compensate the loss of personal injury or death. This is in the form of fidelity guarantee insurance, automobiles insurance and machines etc.)
  5. Crop insurance (crops are insured against losses due to heavy rains and floods, cyclone, droughts, crop diseases, etc.)
  6. Cattle insurance (Insurance for indemnity against the loss of cattle from various kinds of diseases).
    In addition to the above, insurance plans are available against crime, medical insurance, bullock cart, jewellery, cycle rickshaw, radio, T.Vs., etc.

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III. Classification from Risk Point of View 

From risk point of view, insurance can be classified into four categories : Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

  1. Personal Insurance
  2. Property Insurance
  3. Liability Insurance
  4. Fidelity Guarantee Insurance

A brief description of each is given below : Insurance Pdf -Types Of Insurance, Scope Of Insurance ,Classification

Insurance TypeDetails

Personal Insurance

  • Personal insurance refers, the loss of life by accident, or sickness to individual which is covered by the policy.
  • The insurer undertakes to pay the sum insured on the happening of certain event or on maturity of the period of insurance.
  • This insurable sum is determined at the time of affecting the policy and include life insurance, accident insurance, and sickness insurance.
  • Life insurance contains the element of investment and protection, while the accidental, sickness or health insurance contain the element of indemnity only.

Property Insurance

  • Contract of property insurance is a contract of indemnity.
  • Proof by the assured of loss is an essential element of property insurance.
  • The policies of insurance against burglary, home-breaking or theft etc. fall under this category.
  • The assured is required to protect the insured property.
  • After the loss has taken place, the assured usually required to notify the police as to losses.

There is very Complex Process When We Try to Claim Insurance For Loss or Damage

Liability Insurance

  • Liability insurance is the major field of general insurance whereby the insurer promises to pay the damage of property or to compensate the losses to a third party.
  • The amount of compensation is paid directly to third party.
  • The fields of liability insurance include workmen compensation insurance, third party motor insurance, professional indemnity insurance and third party liability insurance etc.
  • In liability insurance, there may be various reasons for the arising of liability; viz. accident to a worker at the workplace, defective goods, explosion in the factory during the process of production, formation of poisonous gas within the factory, due to the uses of chemicals and other such substances in the manufacturing process.

Fidelity Guarantee Insurance

  • In this type of insurance, the insurer undertakes to indemnify the assured (employer) in consideration of certain premium, for losses arising out of fraud, or embezzlement on the part of the employees.
  • This kind of insurance is frequently adopted as a precautionary measure in cases where new and untrained employees are given positions of trust and confidence.