Question

Explain the various types of Insurance.

Answer 1

The insurance covers different types of risks. All contracts of insurance can be broadly classified as follows:

Life Insurance:
Life Insurance may be defined as a contract in which the insurance company called insurer undertakes to ensure the life of a person called assured in exchange for a sum of money called a premium which may be paid in one lump sum or monthly, quarterly, half-yearly, or yearly and promises to pay a certain sum of money either on the death of the assured or on expiry of a certain period.

Non – Life Insurance:
It refers to insurance not related to humans but related to properties.

Fire Insurance:
Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by a fire during a specified period up to the amount specified in the policy. an interest in the preservation of the thing or life insured so that they will suffer financially on the happening of the event against which they are insured.

Marine Insurance:

Marine insurance is a contract of insurance under which the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. The insured pays the premium in consideration of the insurer’s (underwriter’s) guarantee to make good the losses arising from marine perils or perils of the sea.

Health insurance:

A health insurance policy is a contract between an insurer and an individual or group, in which the insurer agrees to provide specified health insurance at an agreed-upon price (premium). Disability resulting from illness or accident may be a peril to the family because it not only cuts off income but also creates large medical expenses. Health insurance is taken as a safeguard against rising medical costs. It provides risk coverage against unforeseen health expenditures that may result in financial hardship.

Miscellaneous Insurance:

It includes the insurance which is made on the following terms:
Motor vehicle Insurance, Burglary Insurance, Crop Insurance, Sports Insurance, Amartya Sen Siksha Yojana, Rajeswari Mahila Kalyan Bima Yojana is miscellaneous Insurance.