The term insurance is defined as a contract between two parties insurer and insured, whereby the insurer agrees to indemnify certain losses caused to the insured, for adequate consideration, i.e. premium. The party who look for obtaining insurance policy is called insured, whereas the party which assures the other to mitigate the risk is called insurer.
The agreement in which terms and conditions relating to insurance are specified is known as an insurance policy. It contains the details of losses covered by the policy and maximum amount to be paid in the event of death/loss.
There are two types of insurance, i.e. life insurance and general insurance:
- Life Insurance: The insurance which covers life risk of the insured, is life insurance or assurance. In the event of death, the amount is paid to the nominee.
- General Insurance: Any insurance other than the one which covers the risk of life is called general insurance. It includes fire, marine, and other insurances.
Life Insurance
This among of Insurance types, it consists whole life assurance, term assurance and annuity.
General Insurance
This is another type of insurance, it consists fire insurance, marine insurance and Miscellaneous insurance such as vehicle insurance, fidelity insurance, credit insurance, burglary insurance, loss of profit insurance, workmen’s compensation insurance and professional liability insurance.
