“Insurance is a contract between insurer and insured. In return of consideration, insurer promises to pay a specific amount on happening of a specific event.”
Insurance provider known as insurer and the person whose life in the policy is insured is known as insured. Premium paid/ being paid for the sum assured / risk cover (Specific amount) is stands for consideration, specific amount (sum assured) is payable only on happening of event specified buyer of Policy is called Proposer
Insurance works on the mechanism of transfer of risk. When an individual transfer his risk to insurer, insurance takes place. When an insurer transfers his risk beyond his bearing capacity to another insurer, Re-insurance take place. Insurer is the customer in the activity of Re-insurance.
MARKETING OF INSURANCE
Insurance is marketed through direct or indirect marketing system. When there is no middleman between insurer and insured at the time of taking place of insurance contract, it’s known as direct marketing system Internet system is the latest development of direct marketing. When the person like organisation/ individual agent/corporate agent/ insurance broker are there, its known as indirect marketing. Insurance agent represent insurer where as broker represent a customer but remunerated both by the same i.e. insurer. Insurance Agent represents one insurer at one time whereas broker represents more than one, having variety of products under one roof.
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