Types of Insurance

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Insurance is broadly classified into two categories: Life Insurance and General Insurance. General Insurance includes Fire Insurance, Marine Insurance, Social Insurance, and Miscellaneous Insurance.

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Life Insurance is a contract whereby the insurer undertakes to pay a certain sum of money on the death of the insured or at the expiry of a specified period, whichever is earlier, in consideration of …

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Life insurance gives protection because the sum assured is paid to the family if the insured dies during the policy period. It also acts as an investment because a maturity amount is paid at the end o…

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Both the insurer and the insured must disclose all material facts honestly. Concealment of any important fact can make the policy void. This principle depends on complete honesty from both sides.

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Insurable interest means a person must have a legal and financial interest in the subject matter insured. In life insurance, a person has insurable interest in their own life.

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Surrender value is the amount paid by the insurer when the insured stops the policy before maturity. It is less than the sum assured.

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A paid-up policy is formed when the insured stops paying premiums after a certain period. The policy continues, but the sum assured becomes proportionately reduced.

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Assignment of a policy means transfer of the rights and benefits of the policy from the insured to another person. It can be absolute or conditional. This is different from nomination.