Insurance handout

Powerful Essays
Insurance
Insurance
a defensive measure used against future conditional losses to hedge the possible risks of the future. It is a legal contract that protects a person from contingent risk of losses through financial means and provides a means for individuals and societies to handle some of the risks faced in daily life.
Policies
the contracts of insurance that are provided by insurance companies. Premium the regular amount charged from customers by the insurance companies, which is paid back, either in part, or entirety, to the customers in case of a definite loss.
Reasons for Insurance: Sometimes in life it is not possible to avoid the losses. For example People may become ill. They may die of illness or accidents or their homes or other property may undergo damage or theft. So in all these cases and they have to face the loss of income or savings. So insurance is a manner of financially insuring that if such an incident comes about then the loss does not affect the present well being of the person.
Importance of Insurance: Insurance plays an important role in sharing the risks of people in an affordable form. It helps the people to quickly recover from damages and losses. Not only does it serve the ends of individuals, or of special groups of individuals, it tends to pervade and to transform our modern social order, too. The role and importance of insurance, here, has been discussed in three phases: (i) uses to individual, (ii) uses to a special group of individuals, viz., to business or industry, and (iii) uses to the society.
Uses to an individual :
1. Insurance provides security and safety.
2. Insurance affords peace of mind.
3. Insurance protects mortgaged property.
4. Insurance eliminates dependency.
5. Life insurance encourages saving.
6. Life insurance fulfills the needs of a person.
Uses to business :
1. Uncertainty of business losses is reduced.
2. Business-efficiency is increased with insurance.
3. Key Man



References: http://EzineArticles.com/?expert=Sadaf_Shahid http://www.preservearticles.com/2012040629929/what-is-the-role-and-importance-of-insurance.html http://www.letslearnfinance.com/features-of-insurance.html http://en.wikipedia.org/wiki/Insurance_policy http://en.wikipedia.org/wiki/Insurance_policy http://www.investopedia.com/erms/i/insurance-coverage.asp http://articles.economictimes.indiatimes.com/2011-07-20/news/29794993_1_life-insurance-policy-insurance-plan

You May Also Find These Documents Helpful

  • Good Essays

    The whole point of having proper insurance is to minimize the risk of bad things happening to us. In some cases, having insurance is very good. There are some insurances that almost all of us should have. These are things like car insurance, health insurance, term life insurance and long term disability insurance. They will prevent you from being had financially in the event that san emergency of multiple sorts happens. It makes sense to insure yourself for things that are likely to happen, but it makes no sense to insure against things which will never happen, otherwise you'd see a flurry of alien abduction insurance policies being created. Here are some times of insurance that you do not need and should avoid. Cancer Insurance. This policy…

    • 1274 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Insurance is a way of looking at the risk, and knowing that an acceptance of loss is present, but it is not as large as it could be. Companies carry insurance policies to prevent obtaining a large liability from an accident or damages from acts of nature. By insuring the company, assets, or even the employees, management is saying that they accept there will be a loss, and the only gain is the company is insured, therefore, a claim can be made to replace or receive monies for the loss (McCarthy, p. 75).…

    • 689 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Insurance Options in America

    • 2491 Words
    • 10 Pages

    Individuals acquire health insurance for similar reasons they may acquire auto or homeowners insurance. Health insurance is a an agreement for the insurer to provide or reimburse medical care costs provided to the insured individual in the event of an illness or injury. [ (Obringer, 2006) ] Insurance is provided to individuals on a high risks kind of platform. An insurance company, like BCBS or The Hartford, agrees to pay certain medical costs incurred by the insured during the year of coverage. A health insurance policy tells what the insurance company and the insured will pay for medical expenses. The policy may stipulate that a co-payment be paid by the insured and the remaining bill will be picked up by the insurer. [ (Obringer, 2006) ] Or, the insurer may…

    • 2491 Words
    • 10 Pages
    Best Essays
  • Satisfactory Essays

    4. Describe two types of insurance that you have or are likely to have at some point in your life. What risks are these insurance plans protecting you against? Why do you think these types of insurance are important? (4-8 sentences. 3.0 points)…

    • 1125 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The concept of insurance is based on spreading the risks; it does not necessarily mean the risk will happen but chances are that it might happen. The concept is on taking…

    • 316 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    The Uninsured

    • 2364 Words
    • 10 Pages

    As a growing number of Americans find themselves without health insurance, it is demanded that the United States explore innovative policies aimed at extending coverage. The high cost of expanding coverage raises many questions about how best to improve access while preserving individual choice and maintaining quality of care. Differing viewpoints among policymakers, insurers, doctors, hospital administrators, employers, public health advocates, and health policy researchers provide a complete picture of the current and desired state of American healthcare.…

    • 2364 Words
    • 10 Pages
    Best Essays
  • Satisfactory Essays

    personal finance

    • 409 Words
    • 2 Pages

    Insurance that protects you by helping to cover costs that are caused by events you're responsible for.…

    • 409 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    personal finance

    • 404 Words
    • 2 Pages

    Liability insurance protects you by helping to cover costs that are caused by events you're responsible for.…

    • 404 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    I Need Help

    • 369 Words
    • 2 Pages

    Describe two types of insurance that you have or are likely to have at some point in your life. What risks are these insurance plans protecting you against? Why do you think these types of insurance are important?…

    • 369 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    The insurance industry is a noble profession, helping people in their time of need and…

    • 2805 Words
    • 15 Pages
    Powerful Essays
  • Powerful Essays

    The Hazard Of Moral Hazard

    • 2969 Words
    • 8 Pages

    When someone insures you against the consequences of a nasty event, oddly enough, he raises the incentives for you to behave in a way that will cause the event. So if your diamond ring is insured for $50,000, you are more likely to leave it out of the safe. Economists call this phenomenon “moral hazard,” and if you look around, you will see it everywhere. “With automobile collision insurance, for example, one is more likely to venture forth on an icy night,” writes Harvard economist Richard Zeckhauser. “Federal deposit insurance made S&Ls more willing to take on risky loans. Federally subsidized flood insurance encourages citizens to build homes on flood plains.”…

    • 2969 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    Moral Hazard Essay

    • 850 Words
    • 4 Pages

    Insurance companies make their money from their monthly premiums and investment returns. One of the main expenses for any insurance company is covering the loss for an individual, firm, place, etc. As a business it is known that Insurance companies identify the client before actually letting them use their services to see if they could come out to make a profit. A key risk factor that is known today is Moral Hazard. Moral hazard is unbalanced asymmetric information. Insurance companies control Moral Hazards by offering a way for the insured person or party to pay something small for the services they have to prevent them from using it frequently. For example, with the health insurance markets, Insurance companies will allow the individual to use their services but they will have to pay a co-pay and deductible so that the costs will not be raised even more for the insurer. According to J.B. Maverick, “Such a policy and usage of deductible amounts in an incentive for the insured to cut down on services and to avoid making claims” (Maverick Web…

    • 850 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, Insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose.…

    • 6406 Words
    • 26 Pages
    Powerful Essays
  • Satisfactory Essays

    Health Insurance

    • 166 Words
    • 1 Page

    Why is health insurance important? Health insurance is important because health insurance can help cover medical expenses that are higher in price, and allows individuals to see a doctor or medical professional before their conditions become worse. Health insurance protects individuals from unexpected, high medical costs, and allows for free preventive care. For example, some insurance offers free vaccines, screenings, and some checkups. Lastly, when individuals have insurance they are not penalized compared to individuals who are.…

    • 166 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Marketing In Canada

    • 482 Words
    • 2 Pages

    *Insurance - It is a risk management from one entity to another in exchange for payment.…

    • 482 Words
    • 2 Pages
    Powerful Essays

Related Topics