MBA (Finance)III – Semester, Merchant Banking and Financial Services, Unit 5.1
Types of Insurance Companies and Policies
Insurance companies can be categorized into two main divisions which are classified as follows:
Types
of Insurance Companies
Insurance companies can be
categorized into two main divisions which are classified as follows:
General Insurance Companies: They provide all types of insurance apart from
life insurance i.e., fire insurance, marine insurance, vehicle insurance etc.,
Life Insurance Companies: The companies, dealing with life insurance,
pension products and annuities are life insurance companies.
Types
of Insurance Policie
Insurance provides
compensation to a person for an anticipated loss to his life, business or an
asset. Insurance is broadly classified into two parts covering different types
of risks:
Life Insurance (Long-term)
General Insurance (Non-life
Insurance)
Life Insurance
“A contract in which the insurer undertakes to a pay a certain sum of money to the insured, either on the
expiry of a specified period, or on the death of the insured, in consideration
of payment of ‘premium’ for a certain period of time, is known as ‘life
insurance”.
It is otherwise called as ‘Life
Assurance’. Generally, the tenure of Life insurance policy is long-term
in nature; it may either be for a certain period or whole life period of the
insured. Insurance against risk to one’s life is covered under ordinary life
assurance. Ordinary life assurance can be further classified into several
types:
