Insurance is a contract between an insurer and insured where the insurer agrees to compensate the insured for financial losses in exchange for a premium payment. It helps manage risk by providing financial protection against uncertainties. The main types of insurance are life, health, property, and liability insurance. Key principles are utmost good faith, insurable interest, and indemnity. The process begins with an application, then the insurer assesses risk and sets a premium, issuing a policy if accepted that outlines coverage terms. Insurance benefits include financial protection from hardships, enabling savings and investment, and contributing to economic growth through stability and confidence.

1. Insurance Class 11
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2. 1
Introduction to Insurance
• Insurance is a contract between two parties, the insurer and the
insured, where the insurer agrees to compensate the insured for any
financial losses in return for a premium payment.
• Insurance helps individuals and businesses manage risk by
providing financial protection against future uncertainties.
• The different types of insurance include life insurance, health
insurance, property insurance, and liability insurance.

3. 2
Principles of Insurance
• The principle of utmost good faith requires both parties to disclose
all relevant information truthfully and completely.
• The principle of insurable interest ensures that the insured has an
interest in the subject matter being insured.
• The principle of indemnity states that the insured should be
compensated for the actual financial loss suffered, not more or less.

4. 3
Insurance Process
• The insurance process begins with the application, where the
insured provides information about the subject matter being insured
and the risk involved.
• The insurer assesses the risk and determines the premium to be
paid.
• If the insured accepts the premium, a policy is issued, which is a
legal contract that outlines the terms and conditions of the insurance
coverage.

5. 4
Benefits of Insurance
• Insurance provides financial protection against unforeseen events
that can cause financial hardships.
• Insurance promotes savings and investment by providing a safe and
secure way to manage risk.
• Insurance contributes to economic growth by providing stability and
confidence to businesses and individuals.