June 25, 2021

What is insurance?


There are unforeseen circumstances, and people have misfortunes. If natural environmental disasters and accidents are always the sword of Damocles that each of us faces, insurance companies are a shield to protect everyone's common interests, and are the best teaching methods to transfer corporate risks and compensate for losses. The term "insurance” as mentioned in the "Insurance Law” for single-choice questions means that the insured pays insurance premiums to the insurer in accordance with the contract,and the insurer shall be liable for indemnifying the insurance money for property losses caused by the occurrence of possible accidents as agreed in the contract, or The act of assuming the responsibility for payment of insurance money when the insured person dies, 保險紅利becomes disabled, ill, or reaches the contractual age and time limit.

According to the above definition, firstly, commercial insurance is a kind of civil legal act in the form of insurance contract and economic compensation as the content, which is different from social insurance based on national legislation; secondly, the insured must perform the payment obligation in accordance with the contract. In order to enjoy the right of compensation and economic compensation when an insured accident occurs, it is different from social relief based on unilateral grant; third, the performance of the insurer’s obligation to pay compensation (except for life insurance) is uncertain and depends on the contract The occurrence of an agreed accident (life insurance is also called an incident) is different from a savings system based on a certain beneficiary right.

The basic function of insurance is to transfer risks and compensate for losses, that is, the insured pays a small insurance premium and transfers the risk to the insurer; once a risk occurs, the loss will be shared, and many companies and individuals will share the burden of a small number of enterprises and individuals who have suffered disasters. loss. Therefore, it plays an important role in safeguarding family and personal development that cannot be underestimated in China. First of all, it can ensure the stability of family life. Due to limited personal financial resources, it is difficult to accumulate sufficient reserve funds to deal with natural disasters and man-made disasters. Once destroyed, normal life cannot continue. If individuals and families participate in property insurance and personal insurance, they can obtain compensation and benefits from the insurer according to the insurance contract, thereby ensuring the stability of family life; secondly, they can accumulate personal funds. Because corporate long-term life insurance companies have an investment management role similar to savings. Although participating in long-term life insurance does not buy the opportunity to profit from stocks, there is no risk, and economic security that is vital to life and death can also be obtained. Since the life insurance policy itself has a cash value, can be mortgaged, and can be transferred, it is generally regarded as a personal financial asset abroad. purchasing life insurance is undoubtedly the best way to obtain economic protection and maintain and increase currency value. Investment method.

The origin of insurance

Human development society has been faced with the intrusion of natural environmental disasters and accidents from the beginning. In the process of fighting against nature, ancient Chinese people have sprouted insurance management ideas and primitive insurance research methods to deal with disasters and accidents.

In ancient my country, successive dynasties paid great attention to accumulating valleys and preparing for shortages. Since the Zhou Dynasty in the 11th century BC, there has been a system of building reserve warehouses. In the Spring and Autumn period, Chinese Confucius research put forward the "fighting three surpluses and one" is a representative student thinking of preventing financial risks. Confucius believes that if one-third of the harvested grain can be stored every year, one full year of grain can be stored for three consecutive years.

The various relief preparation strategies implemented in ancient Chinese and foreign history all reflect the primitive insurance ideas of mutual assistance and contain the embryonic form of insurance. In modern times, insurance as a financial system began to appear on the historical stage. In 1667, the first fire insurance firm appeared in the United Kingdom, creating a modern way of operating insurance business. In 1762, Britain established the Fair Man Insurance Company, marking the formation of the modern life insurance system. In 1875, the Insurance Investment promotion Bureau of the Qing Government was established in Shanghai, setting a precedent for China's national insurance industry.

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