Mathematics and Statistics · Ch 10 — Insurance and Annuity
Types of Insurance — Life, Fire, Marine and Property
Types of Insurance — Life, Fire, Marine and Property
Insurance is classified by what it protects. Std XII focuses on the four common kinds and their premium arithmetic.
The main kinds of insurance
- Life insurance — covers the life of a person; the sum assured is paid on death (or on maturity of the policy). It is not a contract of indemnity — the full sum assured is paid regardless of any "actual loss".
- Fire insurance — covers loss or damage to property caused by fire. A contract of indemnity, subject to the average clause when under-insured.
- Marine insurance — covers loss or damage to a ship (hull), its cargo, and the freight during a sea voyage. Also a contract of indemnity.
- Property (general) insurance — covers buildings, machinery, stock and goods against damage or destruction. Indemnity applies.
Premium in each case
How premium is charged
In every case the premium is proportional to the sum insured:
The rate may be given as a percentage (e.g. ), or as a fixed amount per ₹100 or per ₹1000 of the sum insured (e.g. ₹8 per ₹1000). Convert the rate to a consistent form before multiplying — ₹8 per ₹1000 is the same as . …
Cover on a person's life; the sum assured is paid on death or maturity. Not a contract of indemnity — paid in full irrespectiv …
Indemnity cover for damage/destruction of buildings, machinery, stock and goods by fire or other insured perils; the average clause app …
Indemnity cover for a ship's hull, its cargo and the freight against the perils o …