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Insurance Contract

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  • April 2013
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Insurance Contract

Table of Content
Page Number| Subject|
3| Introduction|
3| Insurance Contract Definition|
4| Insurance Contract Benefits |
4| Basic Sections of Insurance Contract |
6| Elements of a Valid insurance Contract|
6| Characteristics of insurance contract|
10| Examples of insurance contract|
11| Conclusion|
12| References|

Introduction
Uncertainty, risk and insecurity are incidental to any form of business. This makes insurance indispensable for a business organization. Insurance may be defined as a contract in writing under which one party agrees to indemnify the other party against a loss or damage suffered by it on account of an uncertain future. Thus, the aim of insurance is to compensate the owner against the losses arising from a variety of risks which he anticipates to his life, property and business. It is a means of pooling of risks, under which a group of people who are subject to an insurable risk contribute regularly to a fund. The fund so created is utilized to compensate those members of the group who actually suffer a loss due to some unexpected calamity. Thus the loss of a few is shared by all the members on an equitable basis. Insurance contract is a special type of contract. The reason we call an insurance contract a special type of contract is because there are certain characteristics that relate to an insurance contract that do not relate to most other types of contracts. In this document we will explain what is Insurance contract in details. Insurance Contract Definition

A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured. The parties to an insurance contract are the policyholder and the insurance company. It is important to understand that the insurance company, in exchange for a premium, promises to...