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Insurance, its types and principles

Insurance is an insurance or agreement between two parties, where one party is obliged to pay contributions/contributions/premiums.  The other party has the obligation to provide full guarantees to the payer of contributions/contributions/premiums if something happens to the first party or their belongings in accordance with the agreement that has been made)

 The term insured usually refers to anything that is covered.


Insurers use actuarial science

 Insurers use actuarial science to calculate their estimated risk.  Actuarial science uses mathematics, especially statistics and probability, which can be used to hedge risks to estimate claims at a later date with reliable accuracy.

 For example, many people buy a home ownership insurance policy and then they pay a premium to the insurance company.  If the covered loss occurs, the insurer must pay the claim.  For some of the insured, the insurance benefits they receive are far greater than the money they have paid the insurer.  Others may not make a claim.  When averaged over all policies sold, the total claims paid out are lower than the total premiums paid to the insured, with the difference being costs and profits.


Insurance company advantages

Insurance companies also benefit from investments.  This is obtained from the investment of premiums received until they have to pay claims.  This money is called "float".[citation needed] Insurers can gain or lose from the changing price of the float as well as the interest rate or dividends on the float.  In the United States, the loss of property and death recorded by insurance companies was US$142.3 billion in the five years ended 2003. But the total profit in the same period was US$68.4 billion, as a result of the float.


Basic principles of insurance

 In the world of insurance there are 6 basic principles that must be met, namely:


 Insurable interest

 The right to insure, which arises from a financial relationship, between the insured and the insured and is legally recognized.


 Utmost good faith

 An action to disclose accurately and completely, all material facts about something to be insured, whether requested or not.  This means: the insurer must honestly explain clearly everything about the extent of the terms/conditions of the insurance and the insured must also provide clear and correct information on the object or interest insured.


 Proximate cause

 An active, efficient cause that gives rise to a chain of events that gives rise to an effect without the intervention of something that begins and is active from a new and independent source.


 Indemnity

 A mechanism in which the insurer provides financial compensation in an effort to place the insured in the financial position he had shortly before the loss occurred (KUHD articles 252, 253 and emphasized in article 278).


 Subrogation

 Transfer of claim rights from the insured to the insurer after the claim is paid.


 Contribution

 The right of the insurer to invite other insurers who share the same, but not necessarily the same obligation to the insured to participate in providing indemnity.


Insurance type

Education insurance


 Education insurance is insurance whose existence is considered very important today.  This is because people think that education insurance is a smart insurance that can guarantee a better education.

Life insurance


 Some people think that this type of life insurance is the same as health insurance.  Life insurance is a type of insurance that provides life insurance is a type of insurance that provides coverage for the death of an insured person by providing financial benefits.  There are some insurance companies that provide payments only after a person dies and there are also companies that provide payments before the person dies.

Health insurance


 This type of insurance is quite popular, where health insurance is an insurance that provides coverage for health problems caused by disease.  This health insurance company provides care services to its insurance members which includes protecting and covering members who are sick, disabled, injured, and other things caused by illness or accident.

Vehicle insurance


 Many people who have vehicles or luxury cars include their personal vehicles with vehicle insurance.  Vehicle insurance is a type of insurance that provides insurance services for vehicles that are damaged, lost, and so on.

Business insurance


 Business insurance is an insurance service that guarantees the insured party with business activities.  There is also this type of service that includes damage, loss, and loss in a fairly large amount but is adjusted to the agreed insurance company policy.  Business insurance is generally owned by companies such as manufacturing companies, services, trade, and so on which in their business activities have risks.

Property insurance


 This type of insurance generally provides services to protect homeowners from risks such as personal property, damage to residences such as fire, and damage to personal items.  This insurance service includes protecting and providing relief if one day there is an accident to the house or the insured item such as fire and so on.

 In addition to the six types of companies, there are still many additional types of insurance with different features depending on the insurance services offered.

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