Insurance is defined as the equitable transfer of the risk of loss, from one entity to another, in exchange for payment. An insurer visa company selling the insurance: and insured for the policyholder is the person or entity buying the insurance policy. Any institution which provides insurance cover to the insurance is an insurance company. It is a company that offers insurance policies to the public interest by selling directly to an individual or thought and another source such as an employees benefit plan.
And insurance companies are usually comprised of multiple insurances against. An insurance company can specialize in one type of insurance, such as life insurance, Health Insurance, or Auto Insurance, or offer multiple types of insurance.
Characteristics of an insurance company
The insurance company has the following characteristic which is, generally, observed in the case of life, marine, fire, and general insurances.
1. Sharing of risk
Insurance is a device to share the financial losses which might befall an individual or his family on the happening of a specified event. The loss arising from these events is if insurance is shared by all the insurance in the form of a premium.
2. Cooperative device
The insurance company brings a group of persons together voluntarily or through Publicity or through solicitation of the agents.
3. Value of risk
The risk is evaluated before the insurance charge the amount of share of an insured, herein called, consideration or premium.
4. Payment of contingency
The payment is made at a certain contingency insured. If the contingency occurs, payment is made otherwise no amount is given to the policyholder.
5. Large number of insurance people
To spread the loss immediately, smartly, and cheaply, a large number of people should be insured. An insurance company does it to spread risks.
Types of insurance companies
a. Life Insurance Company
Life Insurance Company: Life Insurance is an insurance cover that gives out a certain amount of the insurance are there nominated beneficiaries open a certain event such as a death of the individual who is insured. The risk that is covered by Life Insurance includes permanent death, income during retirement, illness. The main product for the same consist of whole life, endowment, term, Medical and health, life annuity plan.
b. Non-Life Insurance Company
Non-Life Insurance Company: non-Life Insurance is any type of insurance other than life insurance. Whole life insurance is broken down into permanent and from Life policies, non-Life Insurance includes many types of other insurance policies list of non-Life Insurance makeover people's property legal liabilities. it is basically an insurance policy to protect an individual against losses and demands other than those covered by Life Insurance.
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