Kinds of Insurance.
The insurance covers a variety of subjects but commonly used insurance policies relate to the following subjects:
- Marine Insurance
- Fire Insurance
- Life Insurance
Marine insurance is concerned with overseas trade. International trade involves transportation of goods from one country to another country by ships. There are many dangers during the transshipment. The persons who are importing the goods will like to ensure the safe arrival of their goods. The shipping company wants the safety of the ship. So marine insurance insures the coverage of all types of risks which occur during the transit.
Marine insurance may be called a contract whereby the insurer undertakes to indemnify the insured in a manner and to the extent thereby agreed upon against marine losses.
Marine insurance is one of the oldest forms of insurance. It has developed with the expansion of trade. It was started during the middle ages in Italy and then in England. The sending of goods by the sea involves many perils; so it was necessary to get the goods insured. In modern times marine insurance business is well organized and is carried on scientific lines.
Fire insurance was started after marine insurance. Marine insurance was useful only to persons engaged in some kind of trade. The fire havoc can be experienced by persons of all walks of life. The Great Fire of London in 1956 destroyed 13,00 houses in four days. This ‘Great Fire’ gave birth to Fire Insurance. Fire Insurance is a contract to indemnify the loss suffered by the insured. This contract does not help in controlling or preventing fire but it is a promos to compensate the loss.
A fire insurance in an agreement between two parties i.e., insurer and insured, whereby insurer undertakes to indemnify the loss suffered by the insured in consideration for his (insured) paying of certain sum called ‘premium’.
A fire insurance contract may be defined as ‘an agreement’ whereby one party in return for a consideration undertakes to indemnify the other party against financial loss which the latter may sustain by reason of certain subject-matter being damaged or destroyed by fire or other defined perils upto an agreed amount.
Life insurance and life assurance are two commonly used words. While ‘life assurance’ is the proper word for life insurance, generally ‘life insurance’ is used. In life insurance contract the amount of the policy is definitely paid, it is a question of time only. The policy may mature during the life time of the assured or it may be paid on his death. Life insurance contract is not a contract of indemnity as in the case of marine insurance and fire insurance. The loss of life cannot be compensated and only a specified sum of money is paid.
Life insurance contract may be defined as ‘a contract whereby the insurer, in consideration of a premium, undertakes to pay an annuity or a certain sum of money, either on the death of the insured or on the expiry of a certain number of years’. Under the contract the sum assured is paid to the assured if policy matures during his life time, or to the nominees of the assured in case of his death. The policy-holder goes on paying to the insurer a pre-determined sum of money known as ‘premium’. The premium may be annual, half-yearly quarterly or monthly, but it must be paid regularly during the period of policy.