An insurer would be unable to compensate all the losses from his own capital. It … Therefore, to make the insurance cheaper, it is essential to insure large number of persons or property because the lesser would be cost of insurance and so, the lower would be premium. Technical know-how. What are the characteristics of an auto insurance policy? 0000007362 00000 n The concept of insurance is pretty simple. When you are thinking of buying an insurance plan, do you struggle with finding the right policy? • Both the general insurance and life insurance industries are dominated by a few large insurers. Sometimes life takes a turn for the worst when you least expected it to. To spread the loss immediately, smoothly and cheaply, large number of persons should be insured. Life insurance companies focus on legacy planning and … General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. If the event or the contingency takes place, the payment does fall due if the policy is valid and in force at the time of the event, like property insurance, the dependents will not be required to prove the occurring of loss and the amount of loss. General Insurance Introduction to General Insurance AUGUST 2014 . 0000008640 00000 n The insurer is liable only to the extent of the actual loss suffered. There are times when you are caught unprepared and do not know what to do. PROVIDE PROTECTION: Insurance provides protection against future risk, accidents, uncertainty. From the company’s point of view, the life insurance is essentially non-speculative; in fact, no other business operates with greater certainties. Sharing risks:. The insurer will protect the insured from the financial liability in case of loss. Suitable general Insurance covers are necessary for every family. 0000027881 00000 n NOTE – There are two editions of this text. From a family and business point of view all lives possess an economic value which may at any time be snuffed out by death, and it is as reasonable to ensure against the loss of this value as it is to protect oneself against the loss of property. Occasionally it might include Health Insurance, but definitely not Life, Annuities and the like. Lighting is not fire. TOS 2. This chapter examines the characteristics of insurance contracts. 0000012207 00000 n Value of Risk. If there is no loss there is no liability even if there is a fire. If you go for a paid-up policy, you will get the benefits of a term policy and a whole life insurance plan. The agent must understand the tax and legal aspects of … Life insurance also has $1000 exposure units. Sincerity. 0000002388 00000 n In past years, tariff associations or mutual fire insurance associations were found to share the loss at cheaper rate. General Insurance. 0000010263 00000 n The insurance contract, however, is aleatory ie., the contracting parties know that the amount to be paid by each party is not equal. 0000006706 00000 n The insurer promises to pay a fixed sum on the happening of an event. Insurance is a device to share the financial losses which might befall on an individual or his family on the happening of a specified event. Sharing of Risk. 0000008400 00000 n In life insurance, the purpose is not to make good the financial loss suffered. 0000005343 00000 n Contract of ‘Uberrimae fidei’ or Contract of Utmost good faith. 0000013063 00000 n 5. The most important feature of every insurance plan is the co-operation of large number of... 3. In a contract of adhesion, one party draws up the contract in its entirety and presents it to … Adhesion. Fire insurance is a contract of good faith. 0000002171 00000 n Situation in which insureds have no input in the design of a policy’s terms. 0000008167 00000 n Secured with … Fire produces heat and light but either o them alone is not fire. General insurance or otherwise known as non-life insurance or property and casualty insurance, is a contract that covers any risk apart from the risk of life. For example, in term-insurance then, payment is made only when death of the assured occurs within the specified term, may be one or two years. 0000002900 00000 n 0000003729 00000 n A master contract is formed between the insurer and the group policy owner for the benefit of the individual members. General Insurance is also known as Property & Casualty Insurance. The following shorthand is used for the three required text books published by The Institutes: CPCU 520 – x indicates Assignment x from . An auto insurance policy financially covers the cost of injury and property damage after an accident. The premium is paid by the insurer who has a financial interest in the asset covered. By getting insured his life and property, he protects himself against the risk of loss. A policy or agreement between the policyholder and the insurer which is considered only after realization of the premium. Thus, the family is protected against losses on death and damage with the help of insurance. General insurance is the insurance of assets, financial assets included. 3. The insurance has the following characteristics which are, generally, observed in case of life, marine, fire and general insurances. A general insurance is a contract that offers financial compensation on any loss other than death. It’s a poor insurance agent that has to twist the facts or leave out important information to … Disclaimer 2. When you leave the organization, it will be available to other members. In fact, the insurance is just the opposite of gambling. • Many consumers of life insurance obtain that product in a group policy that is organised as part of their Similarly, in absence of life insurance, saving requires time; but death may occur at any time and the property, and family may remain unprotected. PreserveArticles.com: Preserving Your Articles for Eternity, 9 interesting facts about Insurance Contract. The insurance is a system wherein large number of persons, exposed to a similar risk, are covered and the risk is spread over among the larger insurable public. General insurance is an annual contract with a lumpsum premium The cornerstone of financial planning, insurance hedges you, your dependents and your assets against financial losses incurred in case of an unfortunate event. 0000004275 00000 n Top advantages of general insurance plans General insurance plans are beneficial because of the following reasons – The insurance premium is the rate multiplie… 0000005978 00000 n The uncertainty is changed into certainty by insuring property and life because the insurer promises to pay a definite sum at damage or death. Life is full of surprises. • When taking out general insurance, consumers may interact with an insurance broker or an insurance agent, as well as the insurer. The owner of the policy pays regular premiums (that are generally locked in at a fixed rate) until the time of the insured’s death. Aleatory contract: Most contracts are commutative, I,e., each party gives up goods or services presumed to be of equal value. J,�fg`����L�ԫY\*�~.�v륄������)��y��e��n*���g[��� �a�U�N���ҭc%�N]�1��Y_t�R������L�z. General insurance includes Property Insurance, Liability Insurance, and Other Forms of Insurance. 0000013925 00000 n 0000011051 00000 n Insurance is an event that is a person to share a financial event that may occur when a specific... Price of Risk:. If the contingency occurs, payment is made. It is important that you speak with your independent insurance agent to discuss exactly what your options are for each of these features. Like all cooperative devices, there is no compulsion here on anybody to purchase the insurance policy. Failure of insurance amounts gambling because the uncertainty of loss is always looming. Nothing is more uncertain than life and life insurance offers the only sure method of changing that uncertainty into certainty. This principle limits the effects that oral statements made prior to the … Insurance is a device to share the financial losses which might befall on an individual or his... 2. What are the Primary and Secondary Functions of insurance? The insurance is not only a protection but is a sort of investment because a certain sum is returnable to the insured at the death or the expiry of a period. 0000003959 00000 n PreserveArticles.com is an online article publishing site that helps you to submit your knowledge so that it may be preserved for eternity. 0000011825 00000 n ��X���1Laf09�v@x���*�l�5 V�}`���ø�њ!�A� �÷�w�w]ۺ6; A general insurance compensates you for financial loss due to liabilities related to your house, car, bike, health, travel, etc. Charity is given without consideration but insurance is not possible without premium. Exactly what your options are for each of these Features rate multiplie… Parol ( or Oral ) Rule! 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