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Insurance Policies To Individuals

Insurance policy- this is a written contract between an insured and an insurance company stating the obligations and responsibilities of each party. Cover – to place insurance in force on an individual, individuals or an organization. Importance / benefits of a policy – this is a monetary benefit paid or payable to a recipient for which the insurance company has received the premiums. Insurance policies Health policy This is an insurance policy that indemnifies for loss, which is income and expenses resulting from bodily injury or sickness.

Importance This policy pays benefits to an insured that becomes ill or injured, provided that documentation is offered to confirm the illness or injury. In health insurance, policy benefits payable as a result of disability from covered sickness or accident. Sickness coverage is rarely written separately, unless the insured also carries an amount of accident insurance with the same company. Who should carry it? a. Individuals who are prone to sickness. b. Employers c. Parents d. Institutions Health policies may be classified as;

1) Cancellable 2) Franchise 3) Group 4) Limited 5) Optionally renewable 6) Guaranteed renewable Life policy This is a policy that transfers part of the financial loss due to death of an insured person to an insurance company. The policy is carried in exchange for a series of premiums payments or a single premium payment, upon the death of an insured, the face value and any additional coverage attached to a policy, minus outstanding policy loans and interest, is paid to the beneficiary. Importance

The risk insured against is the death of a particular person, upon whose death on a stated term, or whenever death occurs if the contract so provides, the insurance company agrees to pay a stated sum or income to the beneficiary. Usually a family member, business or institution. Living benefits may be available for the insured in the form of surrender values or income payments Life insurance cover. This can be taken by: 1. Parents and children 2. Husband and wife 3. Brother and sister 4. Creditor and debtor 5. Family member 6.

Business 7. Institution Life insurance policy is only possible where there is insurable interest. For instance parent and child, wife and husband, brother and sister both have insurable interest in each other because of blood or marriage. In the case of business the relationship gives insurable interest. An employer may insure the life of an employee. On the other hand creditor can be the beneficiary for the amount of the outstanding loan, with the face value reducing in the proportion to the decline in the outstanding loan amount.

Property policy This is a policy that details coverage for business property losses in the three specific areas; a) Buildings All buildings on the site are covered with no coinsurance requirements and on a replacement and on the replacement cost basis include the buildings themselves, the owners personal property used to maintain the buildings and provided to tenant permanent fixtures, equipment and machinery, improvement and betterment by tenants. b) Personal property of the business.

All personal property used in business on the premises, as well as personal property of others under the care, custody and control of the owner of the building used to operate the business and limited coverage for items temporarily away from the premises of the business as well as for property purchased and placed at a new business location. c) Loss of income Reimbursement for loss of income because of inability to collect business rent, interruptions of normal business functions and extra expenses associated with resuming normal business activities as the result of the damages or destruction of business property by an insured peril.

Optionally coverage may be extended to insure against burglary, robbery, theft, and employee dishonesty and boiler and machinery explosion. This policy should be taken by; a. Employers b. Business c. Institutions d. Individuals Liability policy This is a policy which undertakes coverage in the event that the negligent acts or omissions of an injured result in damage or destruction to another’s property. These policies can be purchased with bodily injury liability under various insurance policies. Importance

Liability policy offer coverage that protects business, up to the policy limits, if actions or non-actions of the insured result in a legally enforceable claim for bodily injury, property damage, or personal injury. Included is the coverage for; a) Non owned automobiles used by business in its normal operations, owned automobiles are excluded. b) Host liquor liability where a business is having a social gathering. For instance, liability at an office party would be covered, since the social functions is incidental to normal business activity.

Excluded will be the operations of a liquor store on the premise of the business. c) Fire and explosion legal liability, where the insured is renting business space in a building. If a fire or explosion from business operations is proven to be of negligent origin, the insurer of the owner of the building has subrogation rights against the business. d) Products for which completed operations coverage is provided. This policy should be taken by; a. Business b. Employers c. Individuals d.Institutions

References

1) Francis. D and Michael. K, (1996), Insurance policies. London: Oxford University Press. 2) Abell, D. F. (1989), Insurance Interest: Life Insurance, Englewood Cliffs: Prentice-Hall. 3) Elizabeth, G. and Alexander, D. (2003), Risk Management: Insurance, 4th Edition. London: Prentice Hall. 4) Ford, D. and Brown, P. (2002), Business Security: Managing in Complex Networks, Chichester: John Wiley. 5) Harvey W. Rubin, (2000), Dictionary of Insurance Terms, New York: Hauppauge.

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