What is Social Insurance??

• The aim is to protect individuals who cannot afford topay premiums.
• These types of insurance policies are oftenly promoted by government.
• It provides benefits like pension, disability Insurance,Survivor Benefits and unemployment.

• In US, Social Insurance schemes are:

1. Social Security
2. Medicare
3. The PBGC program
4. Railroad retirement program
5. Unemployment Benefits
6. Industrial Insurance

For more information http://www.ssa.gov/

• In India,

1. Social Security and insurance, employment and unemployment
2. Welfare of Labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pension and maternity benefits
3. for physicallly handicapped persons:ESIC and EPFO

For more information http://labour.nic.in/ss/welcome.html

What are the different types of Insurance??

1.       Social insurance               

E.g. OASDI, MEDICARE, UNEMPT

2.       Private insurance

1)      Life insurance

a)      Whole life

b)      Term

c)       Endowment

2)      Health insurance

a)      Annuity

b)      Disability income

c)       Long term care

d)      Medical, expense, health accident injury

3)      Non-life insurance

a)      Liability loss

b)      Workers compensation

c)       Property loss

Six Fundamental laws of Insurance

1. Indemnity : Insurance company covers the actual loss of policyholder/Insured.
2. Insurable Interest : The loss incurred must affect insured directly.
3. Utmost good faith/uberrima fides: Insurance company must conceal personal information about policyholder.
4. Subrogation : Insurance company gets legal rights to act on behalf of insured.
5. Cause of Proxima/proximate cause : Actual cause of loss.
6. Contribution : When claim is to be settled by one or more insurance compnies this concept comes into picture.

What is Insurance..one liner...

In simple words, Insurance is nothing but preparation for unexpected event.