KINDS OF INSURANCE

Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange
for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance. There are some kinds of Insurance that are explained below :

On the development point of view Insurance can be classified as

1.Life insurance

2.Marine insurance

3.Pire Insurance

4.Medical insurance

5.General insurance

Life Insurance

Life insurance is essential for any major money earner in a family, regardless of where one works. It helps to protect the
lifestyle and home of the insured’s family in the event of his untimely death. Term life insurance is the least expensive, but it has limitations on its duration, which can be specified by the insured. Whole life is more expensive, but it remains in effect for the life of the insured as long as premiums are
paid on time. (Life insurance is a contract between the policy holder and the insurer, where the insurer promises to pay
a designated beneficiary a sum of money upon the death of the insured person Depending on the contract, other events
such as terminal illness or critical illness may also trigger payment in return, the policy holder agrees to pay a stipulated amount (at regular intervals or in lump sums).
In some countries, death expenses such as funerals are included, in the premium; however, in the United States the predominant form simply specifies a lump sum to be paid on the insured’s demise. The value for the policy owner is the ‘peace of mind’ in knowing that the death of the insured person will not result in financial hardship.

Marine Insurance

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination Marine insurance is a type of Insurance that covers boats and ships, as well as their cargo and in some instances the places where the boat or ship is docked. It has a colorful history, beginning informally in England during the 17th century. In 1906, the Marine Insurance Act was passed under British law, creating a
standard operating procedure for policies that dictates the world’s policies to this day. The standards set forth by the act are considered reasonable, but due to changes in technology and social standards, the act is generally seen as obsolete and is being replaced by more modern legislature
Kinds of Marine Policies
The document containing the terms and conditions of the
contract is called the Marine Policy. It must contain the names of the assured and the insurer or insurers. The subject-matter insured and the risk covered in the voyage
or period of time or both and the sums insured. It must be duly signed by the insurer and stamped under the Stamp
Act, 1899. The Marine Insurance Act deals with the following
types of policies:

Voyage Policy: When the contract is to insure the subject matter at and from one place to another, the policy is called a “Voyage policy” In this case the risk attaches only when
the ship starts on the voyage.

Time Policy: – Where the subject-matter is insured for a definite period of time, it is called a “Time Policy) The ship
may pursue any course it likes: the policy would cover all the risks from perils of the sea for the stated period of time. A time policy cannot be for a period exceeding one year, but it may contain a continuation clause.

Mixed Policy:- It is a combination of voyage and time policies and covers the risk during particular voyage for a specified
period of time.

Valued Policy:- It is a policy, which specifies the agreed value of the subject-matter insured. If there is no fraud or misrepresentation, the value in a valued policy is conclusive as between the insurer and the insured, whether the loss is
partial or total.

Open or Un-valued Policy: In this policy the value of the subject-matter insured is not specified. Subject to the limit of the sum assured, it leaves the value of the loss to be
subsequently ascertained.

Floating Policy:- The practice of taking out floating policies has come in vogue because of the difficulty of knowing by which ship or ships the goods are to be shipped. Such a
policy therefore only mentions the amount for which the insurance is taken out and leaves the name of the ship(s) and other particulars to be defined by subsequent
declarations.

Fire Insurance

Fire insurance is a contract to indemnify the insured for destruction of or damage to property or goods, caused by fire, during a specified period. The contract specifies the
maximum amount, agreed to by the parties at the time of the contract, which the insured can claim in case of loss. This amount is not, however, the measure of the loss. The
loss can be ascertained only after the fire has occurred. The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy.
Fire insurance is a form of property insurance which protects people from the costs incurred by fires. When a.structure is covered by fire insurance, the insurance policy will pay out in the event that the structure is damaged or destroyed by fire. Some standard property insurance policies include fire insurance in their coverage while other cases, fire asurance may need to be purchased separately. Property owners should check with their insuranes companies if they are not sure whether or not fire insurance is part of their policies, and if fire insurance is not included
it should be purchased.

4 Medical Insurance or Health Insurance

Medical insurance is a contract between the proposer and the Insurance company that mentions the insurance company will pay a portion of medical expenses if the insured
is sick or injured and need medical care The insured is required to pay the Insurance company a premium in each month Some contracts also specify that the insurance
company will pay a portion of insured’s medical expenses to make sure that the proposer don’t get sick, such as paying
for annual physical exams. wellness visits and immunizations. The amount the insurance company will pay, and under what circumstances they’ll pay is known as coverage and can differ significantly from policy to policy.

General Insurance

General insurance is also known as non-life insurance policies including vehicles and homeowners insurance policies and provides payments depending on the loss.
caused from a particular financial damage General Insurance typically means any kind of insurance that is not determined to be life insurance. It is also called property
and casualty insurance in the US and Non-Life Insurance in Continental Europe. General insurance is a financial
mean of protecting items from certain events (General Insurance comprises of insurance of property against fire.
burglary etc. personal insurance such as Accident and Health Insurance, and liability insurance which covers legal
habilities. It could be applied to car, home, boat or any other valuables, depending on what type of policy the person will
buy and what type of insurance the individual is looking for. Insurance other than Life Insurance falls under the category of General Insurance. There are also other covers
such as Errors and Omissions insurance for professionals, credit insurance etc.

Auto Insurance

Full coverage is required for new cars or those under financing, although regulations vary by state. Auto insurance is designed to help to pay for repairs or replacement in the event of an accident. It may also cover
medical costs for a driver or passengers, or even those for individuals in another vehicle if the insured is deemed to be at fault Auto insurance also covers a vehicle in the event of theft or other forms of damage depending on the chosen policy

Disability Insurance

Disability insurance may protect the insured from financial ruin if he is injured or disabled and can no longer work. This type of insurance is meant to help with monthly living expenses and health care expenses not covered by a health insurance policy. Disability insurance is available in short
term and long-term policies. Short-term insurance pays for approximately 6 months. Long-term insurance starts at the end of 6 months and may last until a person reaches age 65. If an employee is covered through the employer, coverage may average between 60% and 70% of the employee’s current income.

Homeowner’s Insurance

Homeowner’s insurance helps to cover losses of a home or property due to fire, natural disaster, faulty electrical work.
bad plumbing and more I the insured have a mortgage, he will most likely be required to carry some form of homeowner’s insurance.

Long-Term Care Insurance

Long-term care protection is designed for those diagnosed with chronic illnesses and the elderly may help to provide for nursing home or at-home health care. Long-term care policies may also help to pay for adult day care services and assisted living facilities.

Miscellaneous or Liability Insurance

Miscellaneous Insurance’ refers to contracts of insurance other than these of Life, Fire and Marine insurance. This branch of insurance is of recent origin and it covers a variety of risks.

1. Personal Accident Insurance – It is the insurance for individuals or groups of person against any personal accident or illness. In India this type of insurance is done by the General Insurance Corporation. The risk insured

in personal accident insurance is the bodily injury resulting solely and directly from accident caused by violent, external and visible means. Under this policy the insurer pays the specified sum, if the insured sustains any bodily injury resulting solely and directly from accident caused by external violent and visible means.

2. Property Insurance Property risks relate to burglary, house breaking, theft, crop insurance, etc. Any property, movable or immovable, present or future, vested or contingent can be insured from losses by accidents other than fire and marine adventure. The most popular in this branch is burglary insurance.

Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home Insurance, or boiler insurance. Property is insured in two
ways namely open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage causing events as fire, lightning, explosion, and theft.

Liability Insurance : A person can insure himself against the risk of death and personal injury, or damage, destruction of property. Likewise there can also be an insurance against the risk of incurring liability to third parties. The risk of hability arising out of the use of property comes under the category commonly called “liability insurance. It includes

1. Public Liability Insurance: That is, an insurance against a liability imposed by law. For example, a house owner may obtain an insurance against his liability to Invitees or licensees, arising from body injury or damage to property.

ii. Professional Negligence Insurance: These policies give professional indemnity cover to accountants, solicitors, lawyers, from any loss or injury due to any negligence in the conduct of their professional duties.

iiiCompulsory Insurance: The ESI Act makes it compulsory for the employers (covered under that Act) to insure their workmen by providing certain benefits to them in the event of their sickness, maternity and employment insurance. The employees insured are entitled to (a) Sickness benefit, (b) Maternity benefit. (c) Disablement Benefit, and (d) Dependent’s benefit.

iv.Employer’s Liability Insurance: The liability of an employer under the modern labour laws, has considerably extended and the employers are tempted to take out Insurances against such liabilities. For examples, when the employees retire, substantial amount become Immediately payable by way of gratuity, commuted pension, leave salary, compensation, etc. and also the uncommuted pension becomes payable in future. Employers often take insurance policies which assure payment of such amounts, as and when these becomes
payable.

v. Guarantee Insurance: The main types of policies included in guarantee insurance are a insurance for performance of contract, policies, the guarantor/ underwriter insures the promisee or employer against the loss arising by non-performance by the promisor or the dishonesty of the employee. Fidelity policies are the most common type of guarantee policies, taken under contracts of employment where the employee has an opportunity to be dishonest. Such policies cover the risk of losses arising by theft or
embezzlement of money or securities, or by fraud, on the part of employees.
4.Motor Vehicle Insurance : In olden days many of the pedestrians were killed or injured due to motor vehicle accident. They did not get any compensation because the
vehicle owner or driver did not have financial resources to pay compensation. The Motor Vehicles Act, 1939 was introduced compulsory insurance to all vehicles. Now the vehicles cannot ply in a public place without such insurance. The insurance of motor vehicles against damage is not made compulsory, but the insurance of third party
liability arising out of the use of motor vehicles in public places is made compulsory. Third Party Liability insurance
is mandatory for all vehicles plying on public roads in India. So a policy for motor vehicle insurance is, ordinarily, a combined insurance against the damage to the motor vehicle and its accessories, death of or injury to the, occupant of the vehicle and also against the risk of liability for injury to, or the death of, third parties caused by the driver’s negligence.