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Unit 4: Contract of Insurance
Several options like different types of accident benefits, coverage for major illnesses, payment Notes
in instalments for specific needs like children’s education and last survivor benefits are also
available.
Notes The major goal of insurance business is earning the maximum income out of the life
fund and matching the assets with liabilities.
The surplus as stated above is distributed among the policyholders in form of bonus or in case
of some policies may be offered as a reduction to the premium payable.
Group Insurance: Group insurance is nothing but insuring a group of individuals together. This
may be done due to their working in specific group, e.g., being partners, being employees of
same organization or being members of a particular organization formed for a specific purpose.
These products are similar to individual policies but are managed differently.
4.2.2 Types of Non-Life Insurance
As you can see in the figure below, there are various types of non-life insurance.
Figure 4.1: Types of Non-Life Insurance
Types of Non-Life Insurance
Fire Insurance
Marine Insurance
Personal Accident
Aviation Insurance
Third-party
Liability
Motor Insurance
Miscellaneous
Policy
In non-life insurance category, the following types of insurance exists:
1. Marine Insurance: It covers cargo, hull and freight, both ocean and inland transits. Even
oil rigs and drilling platforms are covered under this category.
2. Fire Insurance: It covers the movable and immovable assets against fire and allied perils.
Business stoppage due to occurrence of the peril and consequential loss of profit policies
are issued in this category and a number of add-on perils are covered in this insurance e.g.
engineering machinery breakdown, loss of profits and project insurance, liability including
employer’s liability, Workmen’s Compensation Act policy, public liability, product and
professional indemnity policy are a few examples.
LOVELY PROFESSIONAL UNIVERSITY 51
