Types of Insurance
An insurance policy protects against various uncertainties that may arise in one's life. Having health insurance can help you cover the cost of any illness, while accident insurance can help you get coverage for any type of accident that may occur. There are different types of insurance in the market due to the presence of a large number of insurance companies. But, the scope of this article is only to deal with the type of insurance as prescribed in the business curriculum for CBSE class 11. The types of coverage to consider are:
- 1. Life insurance
- 2. General insurance (which includes fire insurance, health insurance, and water insurance)
Let us consider these types in detail.
1. Life insurance:
Life insurance is a type of insurance policy in which the insurance company agrees on the life of the funder to pay daily/monthly/quarterly/annually.
A life insurance policy is considered a protection against the unfortunate events of life. It can be defined as an agreement between the insurer and the insured in which the insured undertakes to pay the insurance premium at the end of the life of the person (insured) or when the end of the forecast period.
To qualify for a life insurance policy, the person has to provide certain details like age, health history, and type of smoking or drinking. As there are many requirements for people to qualify for life insurance, these requirements can be family needs, education, investment for old age, etc.
Some of the types of life insurance policies available in the market are:
Whole life insurance policy: As the name suggests, in this type of policy, only the sum assured is paid to the named person and it is paid only after the death of the insured.
Some insurance policies require premiums to be paid for life while others may have limits on payments for 20 or 30 years.
Composite life insurance policy: In this type of policy, the insurer undertakes to pay the insured a lump sum once the required age has passed or if the insured dies.
Joint Life Insurance Policy: It is the type of policy where two people are using life insurance, the premium for such policy is paid either jointly or by each person who pays in installments and it is a total. In the case of such a policy, the amount is given to both or one of the survivors after the death of the borrower. These types of policies are usually between a couple or between two partners in a business.
Annuity Policy: Under this policy, the insured is paid the sum assured or the policy amount based on monthly/quarterly/half-yearly, or yearly installments. Payment is made only when the insured reaches one year as stated in the policy.
Gift agreement for children: It is everyone who wants to make sure that they meet the necessary expenses for their children's education or marriage. Under this law, the insurer will pay a certain amount of money to the children who reach a certain age, as stated in the legal agreement.
2. General Insurance:
General insurance covers all other aspects of a person's life except life insurance and includes health insurance, car insurance, fire insurance, water insurance, and other types of insurance. insurance such as pet insurance, sports insurance, crop insurance, etc. We will discuss different types of insurance along these lines.
Fire Insurance: Fire insurance is a type of general insurance policy where the insurer helps to compensate for any damage caused by accidental fire to the person for a specified period as stated in the insurance policy.
Generally, the fire insurance policy is valid for one year and can be renewed every year when the premium is paid, which can be fixed or thrown away. The fire complaint must have the following conditions:
I. It should be a real loss
ii. The fire must be accidental and not intentional
Marine Insurance: Insurance is a contract between the insurer and the insured. In marine insurance, protection is provided against the dangers of the sea. Examples of dangers at sea can be the collision of a ship with a rock in the sea, an attack by a pirate ship, or a fire of a ship. Marine insurance covers three different types of insurance which are marine, cargo, and cargo insurance.
- Ship or Ship Insurance: As the ship is exposed to many perils at sea, the insurance covers the loss due to damage caused by the ship.
- Cargo Insurance: Cargo ships carry many risks which can be theft of goods, and loss of goods at the port or during transit. Therefore, cargo insurance is necessary to cover such losses.
- Freight Insurance: If the cargo does not reach its destination due to any kind of loss or damage during transit, the shipping company will not be charged for the freight charges. Cargo insurance helps cover the loss of cargo caused by such incidents. Liquid insurance is an indemnity contract where the insured can recover the actual cost of the loss from the insurer if a loss occurs under the coverage.
Health Insurance: Health insurance is an effective guarantee to protect against rising health care costs. Health insurance is a contract between an insurer and an individual or group of individuals that the insured undertakes to provide health insurance against certain types of diseases to the insured or individuals. The premium can be paid in installments or as a lump sum and the health insurance policy is renewed every year by paying the premium.
Health insurance can be paid directly in cash or paid after treatment. Health insurance is available in the form of Mediclaim policies in India.
Auto Insurance: Auto insurance is a popular option for car owners. Here, the liability of the owners to compensate people due to the negligence of the drivers killed is assumed by the insurance company. e. Cow insurance: In the case of cow insurance, the cow owner receives money if the cow dies due to an accident, disease, or during pregnancy.
Crop Insurance: Crop insurance is a financial assistance agreement that provides farmers with the event of crop failure due to drought or flood. g. Theft insurance: Theft insurance falls under property insurance. Here, the insured is paid in case of theft for loss of property, damage to household goods, and personal effects due to theft, robbery, or theft.
Frequently asked questions about coverage types
1. What are the five main types of insurance?
The five main types of insurance are:
life insurance
health insurance
fire protection
waterproofing
Car insurance
2. What are the characteristics of the cover?
The features of the cover are as follows:
Agreement
Having a risk
Quick collaboration tool
The payment of the money for the policy and the practice of the event
Head
Union agreement
protection
