SEBA Class 9 An Introduction to Commerce Chapter 8 Introduction to Insurance Solutions in English Medium to each chapter is provided in the list so that you can easily browse throughout different chapters SEBA Class 9 An Introduction to Commerce 8 Introduction to Insurance Question Answer, SEBA Class 9 Elective An Introduction to Commerce Notes in English Medium and select need one.
SEBA Class 9 An Introduction to Commerce Chapter 8 Introduction to Insurance
Also, you can read the SCERT book online in these sections Solutions by Expert Teachers as per SEBA (CBSE) Book guidelines. SEBA Class 9 An Introduction to Commerce Chapter 8 Introduction to Insurance Notes. These solutions are part of SCERT All Subject Solutions. Here we have given Elective An Introduction to Commerce Class 9 SEBA Solutions for All Chapters, You can practice these here.
Introduction to Insurance
Chapter – 8
| UNIT – III INSURANCE |
| Questions |
1. Give a brief introduction about Insurance Business.
Ans: Insurance is described as a social & economical device to reduce risk of loss of human life and other property. Insurance is a contract, where one party takes the responsibility of the risk of another party in exchange of some fixed amount of money. As per the contract, the first party which is taking the responsibility of risk of another party promises to pay a fixed amount of money as compensation to second party; either end of a period or at the happening of some event.
Insurance is a scheme of economic corporation by which members of the community share the unavoidable risks. The risks can be against fire, the perils of sea, death, accidents, burglary etc. Insurance cannot prevent the occurrence of risks but it provides compensation against the losses of risks. It is a scheme which covers large risk by paying small amount of money. Insurance is also means of savings andInvestments.
Insurance can be defined as a legal contract between two parties whereby one party undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain in nature. The other party pays a fix sum of
money (known as premium) to cover such risks.
2. What are the essential characteristics of Insurance?
Ans: The essential characteristics of Insurance are mentioned below:
(i) It is a contract between two parties. One party is the insurance company, one who accepts the risks and the other party is the person/business, which transfer the risks.
(ii) Insurance is a legal contract which came in to effect when both the parties entered into the agreement.
(iii) Insurance is based on ‘utmost good faith’. ‘Utmost good faith’ means the insurance company (insured) will provide each and every information related to the insurance policy to the other party (insurer).
(iv) Insurance is based on cooperative system. It means a large number of persons, who can be considered as members of the cooperative. They all contribute some amount of money and create a big fund.
(v) Insurance provide security against various types of risks of any kind according to the terms and condition specify in the insurance contract.
(vi) Under the contract of insurance, the responsibility of risk is transferred from one party to another party.
(vii) The Insurance Company accepts the responsibility of risk only against some monetary amount paid by the party (insured) to Insurance Company.
3. Describe the different types of Insurance.
Ans: The different types of Insurance are mentioned below:
(a) Life Insurance: This is the most popular form of Insurance. Any person can insure himself either against death or loss & injury of any of body parts. It is a contract in which the injured person insures the rest of his life against the happening of some unexpected events for monetary consideration during the particular period. The insured person can select a nominee, to execute the right to receive, if the policy holder dies. e.g. LIC (Life Insurance Corporation of India).
(b) General Insurance: Insurance contracts other than life insurance contracts are called general insurance contracts. General insurance, unlike life insurance, provide insurance against loss or damages of mainly properties such as fire, theft, marine, accident etc. e.g. GICI (General Insurance Corporation of India).
(i) Fire Insurance: Fire Insurance provides safety against any type of losses arises due to fire. If the property of any insured gets damaged or destroyed, because of fire, the insured will receive the value of such damaged/ destroyed property as compensation from the insurance company.
(ii) Theft Insurance: Theft Insurance provides insurance against the loss arise because of theft. The insurance company pays the insured value of the property as compensation if such property has been stolen.
(iii) Marine Insurance: All international threat mainly takes place in terms of sea ways. Transportation of goods from one country to another via sea always carry huge amount of risk. If ship meets any cyclone and mishappening on sea ways, huge amount of losses occurs. Marine insurance provide security against such uncertainties by providing insurance facility to cover such losses.
4. What are the Principles of Insurance?
Ans: The principles of Insurance are mentioned:
(i) Principle of Utmost Good Faith: The principle of utmost good faith suggests that both parties i.e., Insured and Insurer much disclose all necessary information related to insurance contract to each other in a transparent manner.
(ii) Principle of Insurable Interest: For a valid insurance contract, it is essential that the insured has full interest on the property or life insured by him. This means, if there is any damage to life or property so insured, the insured will have to incur loss due to this damage and insured will be benefited if full security is being provided by the insurance company.
(iii) Principle of Indemnity: Except life insurance, estimation regarding loss can be made on all other types of insurance. So, principle of indemnity applies to all contracts except life insurance.
(iv) Principle of Warranty: The term ‘warranty’ refers certain terms and conditions of the contract which are to be fulfilled by insured. If insured does not follow this terms and conditions, the insurance contract can be cancelled.
5. Describe the benefits or advantages of Insurance.
Ans: The benefits or advantages of Insurance are mentioned below:
(i) Providing Protection: Insurance provides protection against life and properties. Life insurance compensates if there is loss of life, while indemnity insurance compensates if there is loss of any property.
(ii) Investment Elements: A life insurance contract provides not only protection but also helps in investment. A policy holder pays premium to insurance company on a regular interval time.
(iii) Distribution of Risk: Through insurance, the risk of one person can be distributed among many people. The policy holder pays premium.
(iv) Loan of Facility: Banks, financial institutions and insurance companies provides & extend loan facility to the policy holders.
(v) Encouragement to Savings: Every policy holder has to pay premium periodically on the insurance policy under insurance agreement.
(vi) Economic Growth: Insurance helps in growth and development of the economy of any country. Insurance companies collect huge amount in the form of premium and helps in mobilization of fund.
