Insurance overview

Every person is afraid of their own future, children’s health, and the safety of their property. In response to human concerns, insurance was created. To insure means to protect, to protect from something. Insurance has a number of functions, including risk, savings, investment and preventive. You can apply to any insurance company for protection of your interests, but “any” in fact can only create the appearance of protection. To be sure of the future, choose a trusted insurer.

how to define insurance precisely?

At the heart of any insurance is “fear”. Fear for life, property, your financial situation, and a huge number of other fears. If there is fear, there must be a way to protect yourself from it.
Insurance is a form of protection of an individual, group of persons, and property interests from adverse situations of a personal or material nature.
Insurance has a socio-economic essence. Social is manifested in its focus on the interests of society, the creation of personal and material guarantees. The economic essence is inherent in insurance, since its implementation involves the redistribution, accumulation and use of funds.

Insurance functions

Any socially useful phenomenon expresses its essence through its inherent functions. Therefore, to better understand the “filling” of insurance, consider the functions performed by it.
The fundamental purpose is expressed in the performance of the risk function. Insurance exists precisely because of the existence of risks: diseases, old age, loss of property, and others. Within the limits of the risk function, the risks of all insured persons are balanced, because each participant introduces a different kind of danger, greater or less. And the formed monetary Fund should be of such a size as to cover the risk of everyone.

Insurance, as a social phenomenon, also performs a preventive function. We can see it in two ways. On the one hand, the warning is to protect particularly important interests in advance, because we do not contact the insurer “after” an unpleasant situation, but “before”. On the other hand, part of the accumulated money is always spent on preventive measures, that is, aimed at increasing awareness and security.

Control function

Insurance performs a saving function. It is assumed that upon reaching the age specified in the contract, the person will receive a monetary payment.
Since insurance is associated with the turnover of a huge amount of money, it has a control function. It consists in the targeted use of monetary reserves, approximately the same conditions for all policyholders, the financial ability of the insurer to provide compensation to all insured, and the availability of information about the activities of insurance companies.

It may seem unusual, but insurance has an investment function. When a person is preparing in advance for some important events in life, such as a wedding or a child’s admission to University, they can insure such events. And at the appointed time, the insurance company will issue his investment. A person can also include in the contract a condition under which their contributions will be invested in guaranteed assets at the agreed interest rate. When the deadline comes, the original amount will please you with a new size.

Categories

Policyholder – a state, legal entity or individual who has concluded an agreement with the insurer and pays contributions to the Fund.

Insured person – a person (group of persons) for whose benefit the contract is concluded. In certain cases, the insured person = the policyholder.

Insurer – a company (state-owned or not) that accepts the obligation to pay compensation when an insured event occurs.

Mutual insurance

A mutual insurance company is a type of consumer cooperative whose members “insure” each other. Such a company can be considered as a full-fledged insurer. It must have a license, Charter, monetary Fund, managing and controlling bodies. The property interests of participants are protected.

Tariff – the contribution rate, i.e. the amount to be paid to the Fund for a specific insured person or property. The rate is determined by many factors, for example, age: for a young and healthy person, the rate will be lower than for an elderly person. Professional affiliation is important: the more dangerous the activity, the higher the tariff. Gender will play a role, because men are more susceptible to all sorts of risks. If the property is insured, its value is the determining factor.

Reinsurance

Reinsurance-means that one insurer (reinsurer) insures the property interests of another insurer (reinsurer). And if the reinsurer cannot compensate or provide for the obligations assumed, then this mission is transferred to the reinsurer.

The insurance portfolio of all the obligations undertaken by the insurance company. The portfolio is evaluated based on the total amount of contracts concluded with clients.

Insurance premium – the sum of money that the policyholder must pay to the insurance Fund of the organization.

Rating of the most reliable insurance companies

When it comes to the safety of life or property, you can’t rely on luck. Unfortunately, there are many cases of negligence or dishonesty of insurers, omissions, reduced payments and other unpleasant consequences of cooperation with them.

To be sure of a successful result, check out the list of the best insurers. Each of the companies represented has won the recognition of partners, rating agencies and, most importantly, customers.

Mandatory and voluntary

The fundamental classification involves the division of insurance into mandatory and voluntary.

What features distinguish the two species from each other:

Free will. When mandatory, there is a law containing a list of persons or property, in this case, the will of the person is bound by an indication from above. Voluntary implies a choice-to insure or not.
The scale of the distribution. Mandatory is characterized by inclusiveness, while voluntary is characterized by selectivity.
Term. Perpetuity can only be inherent in the mandatory. For a voluntary term-this is one of the essential conditions.
Imperative or dispositivity. We are talking about the terms of the contract, tariffs, list of insurance cases, etc. With regard to compulsory insurance, the parties are guided by the provisions of regulatory acts. In voluntary insurance, the conditions are changeable.
The responsibility for failure. There is in the case of mandatory, not in the case of voluntary