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Insurance -Raksha Investment


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All About Insurance

All About Insurance

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  • 1. Insurance
  • 2. Defining Insurance  Insurance in broad terms may be described as a method of sharing financial losses of few from a common fund who are equally exposed to the same loss.  Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of a guaranteed small loss to prevent a large, possibly devastating loss.  An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage.
  • 3. Defining Risk  A variation in the possible outcome  The degree of uncertainty associated with a particular loss  Greater the accuracy with which the outcome can be predicted the      lower is the risk. Risk is the possibility of an unfortunate occurrence Risk is the possibility of loss The combination of hazards Uncertainty of loss The tendency that actual results may differ from predicted results
  • 4. Basic Characteristics of Insurance  Pooling of losses  Spreading losses incurred by the few over the entire group  Risk reduction based on the Law of Large Numbers  Payment of fortuitous losses  Insurance pays for losses that are unforeseen, unexpected, and occur as a result of chance  Risk transfer  A pure risk is transferred from the insured to the insurer, who typically is in a stronger financial position  Indemnification  The insured is restored to his or her approximate financial position prior to the occurrence of the loss
  • 5. Benefits of Insurance to an Individual  Peace of mind  Aversion of risk  Protects mortgaged properties  Provides self dependency  Tool of savings  Tool of investment  Satisfies various needs
  • 6. Benefits of Insurance to Business  Reduced reserve requirements  Capital freed for investment  Indemnification  Reduction of uncertainty  Reduced cost of capital  Reduced credit risk  Loss control activities  Business and social stability
  • 7. Benefits of Insurance to Society  Protects wealth of the country  Helps in economic growth  Control inflation
  • 8. Insurance Classification Insurance Life Insurance Fire General Insurance Marine Health Auto
  • 9. Principles of Insurance  Utmost Good Faith  Insurable Interest  Principle of Indemnity  Principle of Contribution  Principle of Subrogation  Principle of loss Minimization  Principle of ‘CAUSA PROXIMA’
  • 10. General Rules  Mis-description  Reasonable care  Fraud  Basic principles      Insurable interest Utmost good faith Subrogation Contribution Indemnity  Risk of loss not covered
  • 11. Types of General Insurance Main types of general insurance are:  Fire  Health  Marine  Motor Vehicle
  • 12. Types of Fire Insurance Policies  Specific policy  Comprehensive policy  Valued policy  Floating policy  Replacement or Re-instatement policy:
  • 13. Fire Insurance Claim Procedure  Individuals/corporate must inform insurer as early as possible , in no case later than 24 hours.  Provide relevant information to the surveyor/claim representative appointed by the insurer.  The surveyor then analyzes the extent/ value of loss or damage.  The claim process takes anywhere between one to three weeks.
  • 14. Documents Required  True copy of the policy along with schedule  Report of fire brigade  Claim Form  Photographs  Past claims experience
  • 15. What is Health Insurance? Health insurance, like other forms of insurance, is a form of collectivism by means of which people collectively pool their risk, in this case the risk of incurring medical expenses.
  • 16. Importance of Health  Rising medical costs  Sharing of health related risk  uncertain hospital bills  Expensive/quality health care services  Money value – Sick Vs Healthy  Family health insurance  Tax benefit  Productivity of workforce
  • 17. Types of Health Insurance Plans  Individual health plan  Family floater plan  Senior Citizens’ plan  Critical illness plan  Daily hospital cash and  Unit-linked health plan (ULHP).
  • 18. Defining Marine Insurance Marine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination.
  • 19. Two Broad Categories  Ocean marine insurance  Inland marine insurance
  • 20. Ocean Marine Insurance  Hull  Cargo  Freight  Protection and indemnity insurance
  • 21. Inland Marine Insurance  Extension of Ocean marine insurance  Domestic goods in transit  Property held by Bailees  Mobile equipment and property  Block Policies- “all-risks” basis  Means of transport and communication
  • 22. Defining Auto Insurance Auto insurance (also known as vehicle insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.
  • 23. Auto Insurance Coverage Auto insurance provides property, liability and medical coverage:  Property coverage pays for damage to or theft of the car.  Liability coverage pays for the legal responsibility to others for bodily injury or property damage.  Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses
  • 24. Coverage Levels Vehicle insurance can cover some or all of the following items:  The insured party  The insured vehicle  Third parties (car and people)  Third party, fire and theft  In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)
  • 25. For More information Visit :