Influence, Influencing and Influencer

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 In this 21st century, world has totally changed as it was before few century ago. Before people used to live in the forest, in the bare land, hunting all day for food without any proper objectives or goals. But as time past, they learned the importance of house, they learned the importance of basic needs and they learned that it is necessary to have a specific goal, so that they can contribute to the society or country they live. Because of that, at this present time, we are so lucky to have roads, buildings, health care services, well developed communication systems and other necessary facilities. Have you ever thought that how we human being (social animal) have developed so much as compare to other species in earth? Have you ever though how fast we are evolving as compare to other animals and how we are controlling other animals in earth?  Well, the answer for these question is influence. If you have done self evaluation then you will know how easily we get influence by th...
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Insurance importance/types/principles

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This article is about insurance policy, its important, types, process and risk management including principles. https://bizmgnt.blogspot.com/

Insurance is the contract between insured and insurer, where insurer provides guarantee of compensation of losses to insured  against the premium. Through this loss of one entity is equally divided to another in exchange of payment. It is the main form of risk management against the uncertain loss.

An insurer(insurance company)  is the company selling insurance policy and an insured(policy holder) is the person or entity buying insurance policy. Whereas, premium is the sum assured or collected by insurance company from policy holder.
Image of Insurance
Importance of Insurance
A. On the basis of individuals and family
1.Provide security: Insurance company provides security against the property. Human life is surrounded by uncertain losses like fire, theft, suffering diseases, etc. So, in such cases, insurance company can provide security.  For instance, if a person has make insurance of his property and get damaged by fire then he can easily claim the insurance company for compensation of loss.

2.Profitable investment: To make insurance is also a profitable investment. Because after the maturity of insurance policy or contract, the policy holder gets his/her payment back with certain rate of interest. There are different types of insurance which provides different rate of interest after the maturity of given time. So, it is one of way of profitable investment.

3.Provide employment: Insurance company provides direct and indirect employment facilities to people. Directly, insurance company requires different level of staffs  to carry its day to day operation. Thus, it provide employment facilities. Indirectly, insurance company provides loan facility to needy people, which also provide employment.


B. On the basis of business activities
1. Provide loan facilities: Insurance company collects premium from its policy holders and invest it in productive sectors. It provide loan facilities to needy people against the certain rate of interest.  Generally, premium assured from only one policy holder is not sufficient to provide loan facilities to needy. So, in insurance company, there must be large number of policy holders.

2.Provide safety against good: Industries, producing different kinds of goods and services have to face various problems like fire, theft, damage occur during transportation, etc. These kinds of problems may lead industries to end. But if the industry has make insurance of his goods then there is no any tension of losses. Because insurance company provide guarantee of compensation of loss.

3.Promotes foreign trade: With compare to domestic trade, foreign trade is very risky. Goods are transported from distant places by the means of air, water and land. So there are different types of risks in transit like marine perils, explosion, storm, tempest  etc. Therefore, insurance provides protection against such unpredictable risks.



C. On the basis of nation
1.Economic development: Directly or indirectly, insurance company can bring  rapid positive change in economic development of nation. It invest large amount of money collected from insured in development sectors of nation.  Similarly, it helps in expansion and growth of industries which is very essential in economic development  of nation.

2.Reduce problem of unemployment: There is a vital role of insurance company in reducing problem of unemployment of a country. It requires staffs from top level to lower level to perform its business activities. Likewise, it helps in establishment of other industries which also creates employment facilities to people.

3.Increase living standard: Insurance company provides employment facilities, provide security against losses and ensure development of nation which ultimately increases the living standard of people. Through insurance company people gets many facilities which helps in raising the standard.



 Types of Insurance Company
A.Life Insurance Company
B.Fire Insurance Company
C.Marine Insurance Company

A.Life Insurance Company:
                                        Life insurance company is one of the main well known type of insurance policy. It is the legal contract between insurer and insured, where insurer promises to compensate the loss after the death of insured or after the end of maturity period whichever is earlier against the premium made by insured. But life insurance is not a indemnity policy because the death of people(loss)  cannot be calculated in terms of money. Whereas fire and marine insurance are indemnity because the actual losses can be easily calculated.  In the contract of Life insurance, a policy holder must provide his fair age certificate and health information to insurance company which helps in fixation of premium rate.

Whole life insurance, Endowment life insurance and Term life insurance are the types of Life Insurance Company

B.Fire Insurance Company:
                                           Fire insurance company is legal contract between insurer and insured, where insurer provides guarantee to compensate the loss caused by fire and other specific losses mention in the contract against the premium made by the insured. The life span of fire insurance is comparatively less the life insurance. Fire insurance is also known as indemnity policy because the actual loss of goods can be easily calculated. In fire insurance,a policy holder do not has to provide hiss age certificate and health information in the contract. He has to provide the fair information about goods with which he has insurable interest.

Consequential policy, Blanket policy, Leverage policy, Comprehensive policy, etc are the main types of Fire insurance company

C.Marine Insurance Company:
                                                Marine insurance company is also a legal contract between insurer and insured, where insurer compensate the loss caused by marine/water. Marine insurance is short term in nature.It is also a indemnity policy. Its losses can be easily calculated. Likewise, fire insurance, marine insurance company do not have to provide health information and age certificate. While transporting good from one country to another water transportation is mostly use. At that time loss can be caused by water. So, to get relief from such losses marine insurance is necessary.

Time policy, Blanket Policy, Floating policy, Construction policy, etc are the types of Marine insurance company.


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Principles of Insurance

For the validity of contract, certain  basic elements should be followed. These elements of the agreement of insurance are called principles of insurance.  The following fundamental principles are involved in insurance business:

1. Insurable Interest:  According to this principle, a policy holder must have a particular relationship with the subject matter of the insurance, whether it is the life or property or a liability to which he exposed. The absence of the required relationship renders the contract illegal, void or simply unenforceable, depending on the type of insurance.

2.Utmost Good Faith: The main objective of this principle is to avoid cheating. Both the parties have to follow this principle. If one party does not follow this principle, then another party can make insurance contract void.

3.Mitigation of loss: This principle of insurance is concerned with the way to reduce maximum loss which may occure. According to this principle, insured must  minimize the loss. For instance, if  account holders property  is damaging by fire, then at that time he must try to avoid maximum losses.

4.Principle of contribution: Insurance policy is not made for private gain. It is made for the risk management. A person cannot make insurance of one property at two or more than two insurance  companies. For example: Ram has a house, then he cannot make insurance of his house at more than one insurance company.


If your find this article helpful then please let me know through comment and if you want any other information related to this topic then please comment. And also you can visit my https://bizmgnt.blogspot.com/ to know more about related topic. 

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