Insurance has been developed as a practical means to ease part of the economic problems. Insurance provides economic protection against the losses that may be incurred due to chance events. The Nature of Insurance is to provide economic protection against losses.
Insurance has been developed as a practical means to ease part of the economic problems. Insurance provides economic protection against the losses that may be incurred due to chance events. The Nature of Insurance is to provide economic protection against losses.
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Insurance has been developed as a practical means to ease part of the economic problems. Insurance provides economic protection against the losses that may be incurred due to chance events. The Nature of Insurance is to provide economic protection against losses.
Droits d'auteur :
Attribution Non-Commercial (BY-NC)
Formats disponibles
Téléchargez comme PPT, PDF, TXT ou lisez en ligne sur Scribd
1680’s) Lloyd’s of London The Role of Insurance Insurance Provides Security
Security is peace of mind and
freedom from worry. Most of our economic actions are for the satisfaction of something we perceive as a need. One important need is a sense of security for those whose well-being we are responsible for. The Role of Insurance Insurance Provides Security
There are nearly universal problems such
as death, sickness, accidents, and disability that might occur at any time without warning. Usually, these bring serious financial losses, as well as emotional distress within the family. Insurance has been developed as a practical means to ease part of the economic problems resulting from the above hazards. The Role of Insurance Insurance Provides Security
Life insurance replaces the loss of the
anticipated income of a spouse and/or parent who dies. Health insurance reimburses medical expenses that could be catastrophic. Disability insurance can fill part of the void when one is unable to produce income. Annuities can provide a guaranteed income stream when one ages beyond the capability to produce earned income, or if a person's other financial resources are exhausted. The Role of Insurance What is the main reason individuals buy insurance?
Individuals buy insurance to give
them ------------and -------------. The Nature of Insurance The purpose of any insurance is to provide economic protection against the losses that may be incurred due to chance events such as: 1. Death 2. Disability 3. Medical expenses 4. Home or automobile damage, etc. The Nature of Insurance One party (the insurer), for a set amount of money (premium), agrees to pay the other party (the insured or beneficiary), a sum of money (benefit) upon the occurrence of an event which may or may not occur, during the effective time of the contract, which is called a policy. The Nature of Insurance How does insurance satisfy the need for peace of mind? ____________ .
Ans. Insurance provides E______ P
_________against losses that may be incurred due to chance events that M ____or_____ occur during the effective time of the contract during the effective time of the Basic Insurance Principles Risk Pooling Rather than face the risk of totaling our car and being required to replace it out of current income, we enter a pool, joining others for a known affordable fee, thus sharing the risk with other pool members. This concept of transferring the individual's risk to the pool is as old as mankind first banding into tribes. Basic Insurance Principles Law of Large Numbers If the pool is small, there is the risk of Adverse Selection meaning that there are too few members in the pool to make accurate predictions of the frequency of an occurrence. For example, if I take one die from a pair of dice and roll it 10 times, I might well have 4 fives turn up out of the 10 rolls. However, if it is rolled 100 times, 1000 times, 10,000 times, or 200,000 times, the sides will come up equally to 3 or 4 decimal points. Thus, it becomes predictable. When the frequency of the occurrence is accurately established, losses can be predicted and the amount needed (premium) from each member of the Basic Insurance Principles What is the danger if the risk pool is small? A_____ S______ .
Basic principles of insurance
include: The P____ of risks, and the Law of L ______N ________. Market Leadership LIC (in PSUs) Market share : Approx. 82 % Total Premium : 127822 Rs Cr (2006-07) ICICI Prudential (In Pvt. Sector): Market share : Approx. 5.07 % Total Premium : 7912 Rs Cr (2006-07)