Simply speaking, insurance is the means (a contract) by which risks of loss or damage can be shifted to another party (the insurer – obviously is generally an organisation, the insurance company) on payment of a charge known as premium. The party whose risk is shifted to the insurer is known as the insured. Insurance is largely carried out in two ways –
- Social Insurance – Here, the government takes care of those who are subject to losses due to risk events.
- Voluntary Private Insurance – Here, individuals and groups can buy insurance from an insurance company.
We live in a world of uncertainties and one famous author rightly explains the importance of insurance as “No one in modern world can afford to be without insurance“. Insurance provides various advantages on different aspects of life as Individual aspects, Economic aspects, Social aspects and National aspects.
- Life Insurance policies: Pure Term Insurance with or without return of premium, Non-linked Non-participating endowment insurance (including money back policies), Unit-linked insurance
2. Non-life insurance policies: Health insurance, Critical Illness insurance, Hospital cash policies, Motor insurance, Personal accident insurance, Travel insurance, Home insurance, Crop insurance etc.
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