Insurance

What is Insurance?“Insurance is a type of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium”. It allows people, organizations and other entities to protect themselves against significant potential losses and financial problems at a reasonably affordable rate. Insurance is a means of protection from financial loss.

Importance of Insurance It protects an individual or organization from

extreme loss or hardships It provides relief and security It accelerates economic growth of the company It reduces inflation It increases business efficiency It helps in tax saving

Functions of Insurance Insurance provides certainty of payment at

the uncertainty of loss Insurance provides protection against the

probable chances of loss Risk-Sharing is one of the main function of

insurance Insurance prevents losses It provides capital to the society It improves efficiency It helps in economic progress

Types of Insurance Policies Auto Insurance Health Insurance Disability Insurance Casualty Insurance Life Insurance Property Insurance Liability Insurance Credit Insurance

Insurance CompanyThe Insurance Company provides compensation resulting from loss, damages, injury, treatment or hardship in exchange for premium payments. Insurance company calculates the risk of occurrence then determines the amount payable for the loss to determine the premium amount.

Underwriting Company

Insurance underwriters are employed by insurance companies to help value life insurance, health insurance, commercial liability insurance and homeowners insurance, among others. Underwriters use computer programs and actuarial data to decide the probability and size of a claims payout over the life of the policy. Assessing a policyholder’s risk prior to the policy period and at renewal is an important function of an underwriter.

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