The following article will help you understand the basics of insurance policies and the classification of insurance policies.
An insurance contract is an agreement between the insurance buyer and the insurance enterprise, whereby the insurance buyer is obliged to pay insurance premiums for protection from insurance enterprises. Accordingly, an insurer must pay insurance premiums to the beneficiary or indemnify the insured upon occurrence of the insured risks.
Insurance policy is based on the regulations of the Ministry of Finance and is the nature of a civil contract. However, due to the particularity of the industry, the insurance contract has the following characteristics:
Contracts are based on consensus of the insurer and of the insurance buyer on the basis of voluntary, equitable, and contractual obligations within the framework of the law.
An insurance policy is an expression of responsibility between two parties. The insurance buyer agrees to pay periodic fees and the insurer is responsible for compensating the beneficiary when the contract expires or when the insured event occurs.
2.2. Inability to negotiate
An insurance policy is a contract that can not be negotiated. In most civil contracts, the buyer can discuss and modify the terms of the contract until the agreement is reached. Life insurance policies have been prepared based on the Treasury Department’s guidelines, so it is not possible to change the terms except for the insurer’s information.
Both parties to the insurance contract have rights and obligations; In this case, the party’s rights are the obligations of the other party. The insurance company ensures the payment of risks; On the contrary, the insurance buyers shall ensure the full and timely payment of premiums
2.4. Chance of chance
Starting from the desire to be protected and protected from risk, the insurance contract is risky. If there is no risk in life, there is no insurance policy
2.5. Absolute trust
Insurance is an intangible commodity; So the insurance contract is an engagement that the two parties need to trust each other absolutely. Each party will have a certain degree of risk of trust: the insurer may make a profit / premium and the insurer may refuse to pay interest. Both parties should trust each other and be absolutely honest when entering into the contract
2.6. Charge must be paid
The nature of the policy is monetary relations. The insurance buyer is obliged to pay insurance premiums, the insurer shall be obliged to compensate for losses when the risk arises.
The policy is not civil. In the non-life insurance business, the subject of insurance may be property or civil liability; The insurance buyer can be a legal person, civil lawyer or commercial. Therefore, the insurance contract is civil – commercial mixed or purely civil / commercial.
3. Classification of insurance policies
3.1. Human insurance policy
– Life expectancy
– human accident
The sum insured in the insurance contract shall be agreed upon by the insurance buyer and the insurer in the insurance contract
3.2. Property insurance policy
– Real objects
– Valuable papers in money
– Property rights
The sum insured in the property insurance contract is the sum of money insured by the insurance buyer for such property and approved by the insurance enterprise.
3.3. Contracts for civil liability insurance
A civil liability insurance policy is the civil liability of the insured person for a third person in accordance with the law
The sum insured under the contract of civil liability insurance is the sum of money paid by the insurer to the insured as agreed upon in the insurance contract.