2. INSURANCE
Insurance is a protection against financial loss happening of the unexpected
event.
As an individual’s life is subject to various risks in personal life.
According to business, there happens natural calamities, loss by fire.
Insurance minimize the risk of the loss for an individual and business.
Insurance provides assurance against the loss arising from an event.
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3. TYPES OF INSURANCE
Life Insurance: In this human life is insured against death,
accident etc, it has a major point which says, the contract is not a
contract of indemnity. Life insurance is a guard against the events
that could affect the family in an unfortunate situation.
Fire Insurance: Fire insurance protects the insured against the
risks of fire. Any property which is subject to damage by fire can be
insured against fire. The loss due to fire, lightning and explosion is
also covered by fire insurance.
Marine Insurance: Marine insurance gives protection against
losses caused due to the dangers of the sea. It is very useful for
Foreign trade i.e. for importers and exporters. It covers dangers such
as sinking of the ship, storm, fire, crashing with icebergs etc.
4. TYPES OF LIFE INSURANCE
Whole life policy: Whole life of a person is insured under this policy, the
insured cannot receive the money from the insurance co. till he is alive. This
policy is mere beneficial for the family of the deceased.
Joint life policy: Under this policy two or more persons are jointly assured,
it can be taken by partners of the firm or husband and wife. The amount is
payable either at the end of the policy or death of either of two, which ever
is earlier.
Pension plan policy: This type of insurance is different from all the other
insurance plans, as it does not provide any life insurance cover but it
guarantees income either for life or for a certain period. This type of
insurance is taken so as to get income after retirement.
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Money back policy: This policy is suitable for those people who like to have
savings, in such a policy some amount of money is provided during the
lifetime of the assured and also guarantees full amount to his family when he
dies.
5. Types of Fire Insurance Policy
Valued Policy : Valued policy is taken for the goods whose value becomes
difficult to calculate in case of life insurance policy.This type of policy can be
taken for art work,paintings ,etc.where the value of the damaged articles
become difficult to assess/measure.
Specific Policy : The property is insured for a
definite sum irrespective of the market value.
for example,A property of value Rs.100,000 is
insured for RS.60,000 & the loss due to fire is Rs.30,000 then the
insurance company will pay Rs.30,000 in full as compensation.
6. Reinstatement Policy :This is a type of fire insurance policy where the
insurer undertakes to replace the property or goods lost by fire.in this policy
instead of paying compensation for the property lost by fire,the property is
replaced. The rate of premium is higher in Reinstatement Policy.
Blanket Policy : Blanket Policy covers all fixed and current assets of the
assured in one policy. Under this policy all the assets lying at different places
are covered under one premium and one policy.
7. Types of Marine Insurance Policies
Voyage policy : It is a policy in which the subject matter is insured for a
particular voyage irrespective of the time involved.in this case, the risk
begins only when the ship starts on voyage.eg. Voyage from Mumbai to New
York.
Time policy : time policy is the one in which subject matter is insured for a
definite period of time against perils/dangers of the sea. A time policy cannot
be for a period exceeding one year but it may contain continuation clause i.e.
the risk shall be covered until the voyage is completed or till the arrival of
the ship at the port.s
8. Mixed policy : This policy is the combination of time and voyage policy.it
therefore coversthe risk for both,particular voyage and for a specific period
of time.eg.A policy can be taken from Mumbai to New York for 40 days voyage
starting from 12th October,2017.
Valued policy:under this policy ,goods are insured for an agreed value
between the insurer and the insured .this is taken when it becomes difficult
for the insurer to assess the value of the goods.The agrred value is more than
the actual value of goods as it includes the cost of goods alongwith freight
and shipping charges plus margin for the anticipated profits.
9. Floating policy: floating policy is taken for a large sum covering several
shipments. This policy is taken by exporters in order to avoid trouble of taking
out a separate policy for every shipment. This policy covers several shipments
till the amount insured is exhausted.
Port risk policy: port risk policy covers all the risks of a vessel while it in
anchored at the port for a particular period of time.This policy is applicable
till the departure of the vessel from the port.
10. QA. FILL IN THE BLANKS WITH THE
CORRECT ANSWER.
Insurance is a protection against ____________ arising on the happening of
an unexpected event.
1. Financial loss
2. Financial profit
Insurance ____________ of the loss for an individual and business.
1. Maximize the risk
2. Minimize the risk
11. _____________ policy is taken for the goods whose value becomes difficult to
calculate in case of loss by fire.
1. Blanket policy
2. Valued policy
____________ insurance is taken so as to get income after retirement.
1. Money-back policy
2. Pension plan policy
12. QB. STATE WHETHER THE FOLLOWING
STATEMENT IS TRUE OR FALSE.
Marine insurance gives protection against losses caused due to transportation.
True
False
Whole life policy is beneficial for the family of the deceased.
True
False
13. Blanket Policy covers all fixed and current assets of the assured in one policy.
• True
• False
Mixed policy is combination of floating and valued policy.
True
False
14. QC. Choose the correct options.
Principle of indemnity is not applicable to
Life insurance
Fire insurance
Marine insurance
A policy in which the subject matter is insured for a definite period of time
and may contain continuation clause.
Voyage policy
Time policy
Mixed policy
15. An insurance where the rate of premium is normally very low.
Life insurance
Fire insurance
Marine insurance
an insurance where it covers the loss or damage to vessels, cargo or freight.
Life insurance.
Fire insurance
Marine insurance.
