Insurance is a term used to refer to the action, systems, or business where financial protection (or financial compensation) to life, property, health and others seek relief from the events that can not be expected that could happen such as death, loss , damage or illness, which involves the payment of premiums on a regular basis within a specific period in exchange for policies that ensure such protection.
The term "insured" usually refers to anything that get protection.
Insurers use actuarial science to calculate the risks they assume. Actuarial science uses mathematics, particularly statistics and probability, which can be used to cover risks to estimate the claim at a later date with reliable accuracy.
For example, many people buy insurance policies for housing and then they pay a premium to the insurance company. When you lose a protected place, the insurer must pay claims. For some of the insured, the insurance benefits they receive are far greater than the money they had paid to the insurer. Others may not make a claim. If it is averaged from all policies sold, the total claims paid out was lower than the total premiums paid to the insured, with the only difference is in cost and profit.
Insurance companies also get a return on investment. It is obtained from investing premiums received until they have to pay the claim. This money is called "float". Insurers can benefit or loss from price changes in the float and also interest rate or dividend on the float. In the United States, loss of property and death are recorded by insurance companies was U.S. $ 142.3 billion in five years ended in 2003. However, total profits in the same period was U.S. $ 68.4 billion, as a result of the float.
In the insurance world there are 6 basic principles that must be met, namely:
* Insurable interest right to insure, arising from a financial relationship, between the insured with the insured and legally recognized.
* Utmost good faith An action to disclose accurate and complete, all material facts about something that will be insured both solicited and unsolicited. The meaning is: the insurer must honestly explain clearly everything about the scope of terms and conditions of insurance and the insured must also provide clear and accurate description of the objects or interests of the insured.
* Proximate cause A cause of active, efficient cause a train of events that lead to a result without the intervention of which started and working actively from a new and independent sources.
* Indemnity A mechanism by which the insurer to provide financial compensation to put the insured in a financial position that he had immediately before the loss
* Subrogation The transfer of demand from the insured to the insurer after a claim is paid.
* Contribution Rights of insurer to another insurer invite equally bear, but do not have the same obligations to the insured to participate provide indemnity.
Some people consider insurance as a form of betting in force during the policy period. Insurance companies are betting that the property buyer will not be lost when the buyer paid the money. The difference in fees paid to the insurance company against the amount they can receive when the accident happened almost the same as if someone bet on horse racing (eg, 10 to 1). For this reason, some religious groups including the Amish avoid insurance and rely on the support received by their communities when disasters occur. In communities close and supportive relationships in which its people can help each other to rebuild lost property, this plan can work. Most people can not effectively support the system as above and this system will not work for large risks.
The term "insured" usually refers to anything that get protection.
Insurers use actuarial science to calculate the risks they assume. Actuarial science uses mathematics, particularly statistics and probability, which can be used to cover risks to estimate the claim at a later date with reliable accuracy.
For example, many people buy insurance policies for housing and then they pay a premium to the insurance company. When you lose a protected place, the insurer must pay claims. For some of the insured, the insurance benefits they receive are far greater than the money they had paid to the insurer. Others may not make a claim. If it is averaged from all policies sold, the total claims paid out was lower than the total premiums paid to the insured, with the only difference is in cost and profit.
Insurance companies also get a return on investment. It is obtained from investing premiums received until they have to pay the claim. This money is called "float". Insurers can benefit or loss from price changes in the float and also interest rate or dividend on the float. In the United States, loss of property and death are recorded by insurance companies was U.S. $ 142.3 billion in five years ended in 2003. However, total profits in the same period was U.S. $ 68.4 billion, as a result of the float.
In the insurance world there are 6 basic principles that must be met, namely:
* Insurable interest right to insure, arising from a financial relationship, between the insured with the insured and legally recognized.
* Utmost good faith An action to disclose accurate and complete, all material facts about something that will be insured both solicited and unsolicited. The meaning is: the insurer must honestly explain clearly everything about the scope of terms and conditions of insurance and the insured must also provide clear and accurate description of the objects or interests of the insured.
* Proximate cause A cause of active, efficient cause a train of events that lead to a result without the intervention of which started and working actively from a new and independent sources.
* Indemnity A mechanism by which the insurer to provide financial compensation to put the insured in a financial position that he had immediately before the loss
* Subrogation The transfer of demand from the insured to the insurer after a claim is paid.
* Contribution Rights of insurer to another insurer invite equally bear, but do not have the same obligations to the insured to participate provide indemnity.
Some people consider insurance as a form of betting in force during the policy period. Insurance companies are betting that the property buyer will not be lost when the buyer paid the money. The difference in fees paid to the insurance company against the amount they can receive when the accident happened almost the same as if someone bet on horse racing (eg, 10 to 1). For this reason, some religious groups including the Amish avoid insurance and rely on the support received by their communities when disasters occur. In communities close and supportive relationships in which its people can help each other to rebuild lost property, this plan can work. Most people can not effectively support the system as above and this system will not work for large risks.
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