Chapter 2 Chapter 2

Essence of InsuranceEssence of Insurance

ContentsContents

The meaning of insuranceThe meaning of insurance

The function of insuranceThe function of insurance

The classification of insuranceThe classification of insurance

Insurance refers to a commercial insurance transactionInsurance refers to a commercial insurance transaction

whereby an insurance applicant pays insurance premiumswhereby an insurance applicant pays insurance premiums

to the insurer, and the insurer bears an Obligation to to the insurer, and the insurer bears an Obligation to

indemnify for property loss or damage caused by an indemnify for property loss or damage caused by an

occurrence of a possible event that is agreed upon in theoccurrence of a possible event that is agreed upon in the

contract, or to pay the insurance benefits when the insuredcontract, or to pay the insurance benefits when the insured

person dies, is injured or disabled, suffers diseases or person dies, is injured or disabled, suffers diseases or

reaches the age or term agreed upon in the contract.reaches the age or term agreed upon in the contract.

1. The meaning of insurance1. The meaning of insurance

In simple words, an applicant or insuredIn simple words, an applicant or insured

pays the premiums to the insurancepays the premiums to the insurance

company, the insurer bears the liabilitycompany, the insurer bears the liability

to pay the claims or give the benefit underto pay the claims or give the benefit under

the terms of the insurance policy.the terms of the insurance policy.

featuresfeatures

Risk transferRisk transfer Risk transferRisk transfer

Creation of the common poolCreation of the common pool Creation of the common poolCreation of the common pool

2. The feature of insurance2. The feature of insurance

Equitable premiumsEquitable premiums Equitable premiumsEquitable premiums

FunctionsFunctions

Financial indemnity Financial indemnity and insurance benefitand insurance benefit

Financial indemnity Financial indemnity and insurance benefitand insurance benefit

Financing capital and Financing capital and preventing disasters preventing disasters and lossesand losses

Financing capital and Financing capital and preventing disasters preventing disasters and lossesand losses

3. The Function of Insurance3. The Function of Insurance

4. The Role of Insurance4. The Role of Insurance

Insurance can Insurance can guaranteeguarantee the society’s the society’s reproduction. The risk can be transferred, the reproduction. The risk can be transferred, the social reproduction can be ensured.social reproduction can be ensured.

Insurance can Insurance can guaranteeguarantee the society’s the society’s reproduction. The risk can be transferred, the reproduction. The risk can be transferred, the social reproduction can be ensured.social reproduction can be ensured.

IInsurance can nsurance can ensureensure the insured’s financial interest. the insured’s financial interest. As long as the insured buys insurance, he can get As long as the insured buys insurance, he can get financial indemnity or insurance benefitsfinancial indemnity or insurance benefits

IInsurance can nsurance can ensureensure the insured’s financial interest. the insured’s financial interest. As long as the insured buys insurance, he can get As long as the insured buys insurance, he can get financial indemnity or insurance benefitsfinancial indemnity or insurance benefits

Insurance can bring the stability to the society.Insurance can bring the stability to the society. Insurance can bring the stability to the society.Insurance can bring the stability to the society.

classificationclassification

5.1 Ordinary life assurance5.1 Ordinary life assurance

5.2 Property insurance5.2 Property insurance

5. The classification of insurance

5.3 Liability insurances5.3 Liability insurances5.3 Liability insurances5.3 Liability insurances

Term assuranceTerm assurance

Personal accident insurancePersonal accident insurance

Endowment assuranceEndowment assurance

Group life assuranceGroup life assurance

5.1 Ordinary life assurance

5.2 Property insurance5.2 Property insurance

Motor vehicle insuranceMotor vehicle insurance

Marine transport insuranceMarine transport insurance

Property insuranceProperty insurance

5.3 Liability insurances5.3 Liability insurances

Employer’s liability insuranceEmployer’s liability insurance

Public liability insurancePublic liability insurance

Product liability insuranceProduct liability insurance

Professional indemnity liability insuranceProfessional indemnity liability insurance

Personal public liability insurancePersonal public liability insurance

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