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What is Insurance?
Insurance is a risk management strategy that transfer risk or at least the ability to minimize losses through a method call risk transferring.
Usually risks are transferred to insurance companies who underwrites risks by collecting (pooling) premiums (monies) from policyholders of the same kind of risks.
Since insurance is the method of pooling together resources and spreading the risk around. In this context, insurance can be a pooling of many aspects, such as living and non-living things. Livings things of course would mean all humans, while non-living things would include things that are non-life forms. Below would explain what we mean and the type of insurances.
Types of Insurances?
1. Life Insurance
By it's name "life" means that it represents insurance protecting a living person. For example, any human being can buy a life insurance product and if he or she dies, the pay-out which is the sum insured is paid out to the surviving family members.
Life insurance can also be benefited from, such as in the event of the death of an insured, at that point of death, the person may not have many liquid assets or that his/her other assets may not have gotten a good price from the sale of the asset, but with life insurance proceeds, the fear of selling an asset below its fair value may not be a concern because any life insurance proceeds can definitely cover any of the illiquid assets.
2. General or Non-Life Insurance
This type of insurances are what we call non-life insurance. That means that insurance companies insure anything else with a value place on it.
Types of assets you can insure are, your home, car, businesses, goods, etc.
This sort of insurance are contracted base on indemnity basis and you cannot profit from it. It is more of a replacement of asset kind of insurance.
Insurance is a risk management strategy that transfer risk or at least the ability to minimize losses through a method call risk transferring.
Usually risks are transferred to insurance companies who underwrites risks by collecting (pooling) premiums (monies) from policyholders of the same kind of risks.
Since insurance is the method of pooling together resources and spreading the risk around. In this context, insurance can be a pooling of many aspects, such as living and non-living things. Livings things of course would mean all humans, while non-living things would include things that are non-life forms. Below would explain what we mean and the type of insurances.
Types of Insurances?
1. Life Insurance
By it's name "life" means that it represents insurance protecting a living person. For example, any human being can buy a life insurance product and if he or she dies, the pay-out which is the sum insured is paid out to the surviving family members.
Life insurance can also be benefited from, such as in the event of the death of an insured, at that point of death, the person may not have many liquid assets or that his/her other assets may not have gotten a good price from the sale of the asset, but with life insurance proceeds, the fear of selling an asset below its fair value may not be a concern because any life insurance proceeds can definitely cover any of the illiquid assets.
2. General or Non-Life Insurance
This type of insurances are what we call non-life insurance. That means that insurance companies insure anything else with a value place on it.
Types of assets you can insure are, your home, car, businesses, goods, etc.
This sort of insurance are contracted base on indemnity basis and you cannot profit from it. It is more of a replacement of asset kind of insurance.