One may think insurance and assurance are the same. In fact, Insurance and assurance are having different meaning in financial arena. There are different types of insurance in Business World. Insurance is related to General insurance, Fire insurance, Car Insurance, Marine insurance, fidelity insurance or any other forms of insurance other than the life insurance. Life insurance business is otherwise known as life assurance where by the insurer pays the claim against policies whenever the insured sustains loss.
Different Types Of Insurance
Life Insurance is types of insurances otherwise known as life assurance which in the later stage, has been existed in many other different forms. Medical insurance or health insurance, insurance against partial disablement, loss of limbs or parts of the body, insurance against mesothelioma, cancer etc are alias of life assurance.
General insurance business is done against property and sometimes known as property insurance. Fire, marine, stock, plant and many other similar types of insurances are alias of property insurance.
There are many other types of insurances or policies and coverage in business world. Insurance companies always devises new products based on demographic conditions and needs.
Co-insurance business is a type of insurance business where the property is insured by more than one insurance company. It is a popular method of sharing the risk of a big claim. Do not be confused with the term ‘Re-insurance’ and insurance. Re-insurance is done by an insurance company to secure its own assets with other insurance company. The insurer is otherwise known as ceding company and insured is the beneficiary when the claim is due.
For example, Miracle Insurance Company, insures $100 million of coverage of one of its clients XYZ Limited. If Miracle thinks, it is a big amount of coverage. it can re-insure the part of the coverage with Oracle Insurance Company where the later company will be termed as Ceding Company or re-insurer.
Similarity with all different types of insurance business is that in all cases, the policy holders have to pay premiums. In general insurance almost every year the policies get renewed where life assurance policy is taken once in the beginning and settled when policy matures or the insured sustains losses.