free site statistics

Basics of Insurance

Published 5 years ago by LankaTricks
Basics of Insurance

Basics of Insurance

In present insurance concept is a very important and very popular thing among people in the society. Human beings, their properties and their family members are always exposed to different kinds of risks, hence People transfer their risks to insurance companies. Insurance is a tool which reduces the cost of losses. Also it accumulates funds to meet individual losses.

Insurance may be defined as a contract between two parties. One party called insurer undertakes in exchange for a fixed sum called premium to pay the other party called insured a fixed amount of money after happening of a certain event.

Insurance provides safety and security against on a particular risk such as life insurance provides financial security against old age sufferings and death. Further insurance provides peace of mind. It removes the fears, anxiety, tensions and future uncertainty. Insurance reduces business risks.

Also insurance gives lot of benefits to the society. Following things are some examples for it.

  • Life insurance encourages savings and it accelerates the economic growth of the country.
  • Insurance provides strong hand and mind, with protection against loss of property and capital to produce more wealth.
  • It helps to reduce inflation and it provides credit facilities.
  • Insurance increases business efficiency eliminating the loss of damage, disappearance of property of goods.
  • It helps to promote foreign trade providing protection again trade risk.

The main objective of every insurance contract is to give financial security and protection to the insured from any future uncertainties. Insured must never try to misuse this safe financial cover, because this is a contract between two parties. It depends on credibility of the both parties. An insurer must always investigate about any fraudulent insurance claim. It is also a duty of the insurer to accept and approve all genuine insurance claims. Sometimes insured are seeking profit opportunities by reporting false occurrences. It violates the terms and conditions of the insurance contract. Therefore insurer includes principles in the insurance contract. Insurance contract base on these principles. They are,

  • Principle of Utmost good faith
  • Principle of Insurable interest
  • Principle of Indemnity
  • Principle of Contribution
  • Principle of Subrogation
  • Principle of Proximate cause

These principles are identified under the principles of insurance law. Above all principles are applicable to general insurance contracts and only utmost good faith, insurable interest and proximate cause are applicable to life insurance contracts. These principles are necessary for clear interpretation of insurance contract. Also insurance has two main types. They are,

 

  • Life insurance
  • General Insurance
  • Motor insurance
  • Marine insurance
  • Fire and property insurance
  • Miscellaneous insurance

On the other hand insurance is a contract. It has basic elements of the contract. These elements are,

 

  • Offer & Acceptance
  • Consideration
  • Legal capacity to contract or competency
  • Consensus “ad idem”
  • Legality of object

– The contents we publish on this website regarding the professional and educational courses are extracted from various sources, such as newspaper advertisements, circulars, and websites. The right to this information belongs to the first owner of the information. If any alteration happens to this information, we don’t take the responsibility arising from such alteration. Instead, we do inform you as soon as possible regarding the updated information related to professional and educational courses. Also, we allow access you to gain essential knowledge related to competitive exams.

Related Posts

Basics of Information and Communication Technology - O/L ICT Lesson 01 - P03

Basics of Information and Communication Technology - O/L ICT Lesson 01 - P03

Published 7 years ago by LankaTricks

Information and communication technology is vary impotent subjects in present and It will be more useful for future times. In this post  brings to you the first lesson of Ordinary level Information and communication technology  subject. This Information and communication technology  lessons are extracted from the “Wijaya Pariganaka Sagarawa” and the first lesson of al ICT is Basics…

O/L TutorialsTutorials
AL Accounting Lesson - Control Accounts

AL Accounting Lesson - Control Accounts

Published 7 years ago by LankaTricks

Advanced Level Accounting is important with all students level in Sri Lanka. and Control Account is the one of lesson under the accounting syllabus of the Advanced Level. By using following PDF file you can get 13 question related to the lesson of Control Accounts. In future we hope to give you to more lessons…

A/L TutorialsTutorials
Ravana Waterfall - One of the most popular travel destinations in Ella, Sri Lanka

Ravana Waterfall - One of the most popular travel destinations in Ella, Sri Lanka

Published 9 months ago by LankaTricks

Ravana Waterfall is a part of the Ravana Ella Wildlife Sanctuary. It is located on Ella - Wellawaya road, around 6 km from the Ella Railway Station. Otherwise, travelers can reach Ravana Waterfall by traveling 10 km towards Wellawaya from Kubalwela junction in Badulla - Bandarawela road. This waterfall can be viewed from the main road. Kirindi Oya originates from the south of Bandarawela in the Badulla District based on Ravana Waterfall.

Travel Destinations
JAM Session Tips - How to Prepare JAM Session

JAM Session Tips - How to Prepare JAM Session

Published 5 years ago by LankaTricks

JAM Session Tips – Prepare JAM Session This post talk about JAM Session Tips and how to prepare for JAM Session. and You can practice to face JAM session. Basically for Practicing, You can select some simple JAM Topics such as Bike , Car etc and practice it for some time and also it is…

JAM Topics
Udawalawe National Park, Sri Lanka

Udawalawe National Park, Sri Lanka

Published 11 months ago by LankaTricks

Sri Lanka is a beautiful island with a wide variety of animals and trees. Also, Sri Lanka is one of the countries with the highest natural beauty in the world. Various wildlife areas in Sri Lanka have been designated as National Parks to enhance the protection of these animals and trees. Yala, Wilpattu, Wasgamuwa, Minneriya,…

Travel Destinations
Advanced Level Physics Pass Papers - A/L Physics

Advanced Level Physics Pass Papers - A/L Physics

Published 5 years ago by LankaTricks

If you are a One who are expected to face Advanced level examination in Sri Lanka education stream. You have to get many knowledge about subject area which you ara study. As well as, You have to get good knowledge about what is the structure of your exam papers. Here,  We give you to pass…

A/L Pass PapersA/L Tutorials