1) What is Insurance -
Meaning and Definitions of Insurance -
Insurance is a contract between two parties. Here one party is the insured and another party is the insurer. Insurance provides various advantages to the various field. The elementary purpose of insurance is to provide protection against future risk, accident and uncertainty.
Insurance is a contract between the insurer and insured under which the insurer undertakes to compensate the insured for the loss arising from the risk insured against. In simple words, Insurance is a contract in which one party (the insurer), for a consideration (the premium), assumes a particular risk of the other party(the insured) and promises to pay to the other party or his beneficiary, a certain or ascertainable sum of amount on the happening of specified contingency against which the insurance is asked for.
Some important definitions of Insurance are as follows -
Encyclopaedia Britannica -
According to Encyclopaedia Britannica, " Insurance may be defined as a social device whereby a large group of individuals, through a system of equitable contributions, may reduce or eliminate measurable risk of economic loss common to all member of the group"
Ghosh and Agarwal -
According to Ghosh and Agarwal," Insurance is a Co-operative form of distributing a certain risk over a group of persons who are exposed to it"
John Megi -
According to John Megi, "Insurance is a plan wherein persons collectively share the losses of risk"
Justice Tindall -
According to Justice Tindall, "Insurance is a contract in which a sum of money is paid to the assured in consideration of insurer's incurring the risk of paying a large sum upon a given contingency."
2) Kinds of Insurance -
There are many kinds of insurance available some of them are as follows -
(i) Life Insurance -
Life Insurance provides for your family or some other named beneficiaries on your death. Life Insurance guarantees a specific promised sum of money to a designated beneficiary upon the death of the insured, or the insurance if he survives the term of the policy. Life being the most important asset of an individual, Life Insurance enjoys the maximum scope.There are two general types of life insurance-1) Term Insurance and 2) Whole-life Insurance. Term insurance provides coverage only during the term of the policy and pays off only on the insured's death, on the other hand, Whole-Life Insurance provides saving as well as insurance and can let the insured collect before death.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of insurer; common examples are claims relating to suicide, fraud, war, riot etc
(ii) Health Insurance -
Generally, Health Insurance covers the expenses incurred on the illness of the insured. Such as hospitalization, visits to the doctor's office, and prescription of medicines. It also has sub-type as dental insurance which is done to cover dental costs.
(iii) Disability insurance -
Disability Insurance provides economical support to a policyholder who is unable to work because of disabling illness or injury.
(iv) Liability insurance -
Liability Insurance covers legal claims against the insured. For example, a house owners insurance policy will protect the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance policy indemnifies against the harm done to others life, health or property which an insured might have to pay under certain circumstances. Liability insurance policies covers only the negligence of the insured, and will not apply to result of willful or intentional act by the insured
(v) Home Insurance -
Home Insurance provides protection to property and interests of the insured, his family members who permanently reside with the insured. Home Insurance is designated to cover various risk and contingencies faced by householders under a single policy
(vi) Property insurance -
Property Insurance provides protection against risk to property such as damage, losses due to fire, theft and other named perils. It includes specified forms of insurance such as fire insurance, earthquake insurance, flood insurance etc
(vii) Automobile Insurance -
Automobile insurance is perhaps the most held types of insurance. Typical automobile policy covers liability for bodily injury and property damage, medical payments, attorneys fees in case of a lawsuit. If a person gets an accident, it helps in recovering of the financial loss the person had. It is treated as a contract between a person who is the victim of the accident and the insurance company. However, the insured has the option to cover his vehicle against own damage by paying an extra premium.
(viii) Rural insurance
The rural insurance policy provides coverage for damage or total loss due to fire, flood, storm, Tornado, theft and specified diseases etc. Agricultural insurance, cattle insurance sericulture insurance are covered under rural insurance category.
(ix) Credit insurance
Credit Insurance repays some or all of a loan when certain contingency happens to the borrower such as unemployment, disability or death.
(x) Casualty insurance
Casualty Insurance insures against accident, not necessarily tied to a specific property. The process of fast development in the society gave rise to a number of criminal acts. This particular insurance helps in providing support that covers policyholder against losses arising from the criminal acts of the third party.
Difference / Distinction Between Wagering Agreement and Insurance Contract
Essential elements of Wagering Contract