History of Insurance: Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools client’s risks to make payments more affordable for the insured. These policies are used to hedge against the risk of financial losses, both big and small that may result from damage to the inured or her property, or from liability for damaged injury caused to a third party. Insurance companies are growing much faster because people in European and Western countries know their benefits. Life insurance is now the biggest tools to ensure one’s future prosperity after the death of him and her.
Insurance is as old as a historical society. Contracts were known to merchants of Babylon as early as 4000-3000 BCE. Hindus in 600 BCE also practiced it in the form of Bottomry and in Greece started in the 4th century BCE. The insurance industry can accurately be traced back in 1666 to the Great Fire of London. Dr. Nicholas Barbon was instrumental in forming the first insurance company bu the name of ” The Insurance Office” and worked on providing insurance against fire for houses and was located in a small office behind London’s Royal Exchange.
The Great Fire of London was a major fire that swept through the central parts of the English city of London from Sunday, 2nd September till Thursday 6th September. Before this, in 15th century Marine Insurance became a highly developed form of insurance in Rome. In Rome, there were also burial societies that paid funeral costs of their member out of monthly dues.
History of Insurance, The First American Insurance company was organized by Benjamin Franklin in 1752 as the Philadelphia Contribution ship. In the Era following the U.S Civil War, bad practices developed, dividends were declared that had not been earned, reserves were inadequate and office buildings were erected that sometimes cost more than the total assets of the companies. It started getting growth after 1910 in America, mostly life Insurance.
China was in the Asia Pacific that has introduced Insurance in the 1800s, the name was People’s Insurance Company.
Types of Insurance
There are two broad types of insurance.
- Life Insurance
- General Insurance
Life insurance is a contract that offers financial compensation in case of death or disability. Some life insurance policies even offer financial compensation after retirement or a certain period of time.
General life insurance is a contract that offers financial compensation on every loss other than death. It ensures everything apart from life, like a house, cars, bikes, health, travel, and marriages, etc.
There are numbers of insurance policies available in every country depending on the demand and needs of the people. these are the following.
- Agricultural insurance
- Deposit insurance
- Flood insurance
- Health insurance
- Liability insurance
- Mortgage insurance
- Pet insurance
- Property insurance
- Vehicles insurance
- Travel insurance
Benefits of Insurance
Insurance benefits individuals, organizations and society in more ways than the average person realizes. Following are benefits of Insurance.
- General insurance covers the losses of things and property.
- Business insurance manages cash flow uncertainty.
- It also complies with the legal requirements.
- It controls the risks of damages.
- Efficient use of insured resources.
- Insurance facilitates loans to individuals and organizations to support in bad times.
- The saved amounts in the form of the collected premium are reinvested in developmental projects.
- The last benefits of insurance are reducing social burdens. Education. marriage and health plan reliefs the worries of a common man.
The basic procedure of Insurance is common in all countries of the world. But here are some differences in the rules and legal policies of the country. The basic procedure is that insurance company sell a plan to individual and organizations depending on demands and benefits. The company collects a premium or fixed amount from the person or entity every year. and also adds bonuses to them. After 20 or 15 years the person gets double or triple the amount he/ she has submitted to the company.
In life insurance policy the persons sign a contract for ten or twenty years and then he can claim his amount. in case of death, the nominee or guardian of that person can claim that amount.
In Education and Child marriage plan the guardian also claims the amount on maturity of the time period.
Insurance is the need of time because it ensures life and property. For future security and for the financial benefits the middle and working class are taking huge interests. in America and European countries, every individual’s life and the property is insured by the Government. In case of losses, they can easily claim the amount.
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