1.
Explain Risk and Risk Management
1 Risk refers to the possibility of loss, damage, or any unfavorable event occurring in the future.
2 Risk arises due to uncertainty about future events.
3 Risks can be financial or non-financial in nature.
4 Examples of risk include accident, fire, theft, illness, and death.
5 Risk cannot be eliminated completely but can be controlled.
6 Risk management is the process of identifying and controlling risks.
7 It involves analysis and evaluation of possible risks.
8 Risk management aims to minimize losses.
9 Insurance is an important tool of risk management.
10 Proper risk management ensures financial stability.
2. Explain Insurance and its Principles
1 Insurance is a contract between insurer and insured.
2 It provides financial protection against future losses.
3 The insured pays premium to the insurer.
4 Principle of Utmost Good Faith requires full disclosure of facts.
5 Principle of Insurable Interest means financial interest in subject matter.
6 Principle of Indemnity compensates only actual loss.
7 Principle of Subrogation gives rights to insurer after claim payment.
8 Principle of Contribution applies when multiple policies exist.
9 Principle of Proximate Cause identifies real cause of loss.
10 These principles ensure fair insurance practice.
3. Meaning, Functions, and Types of Reinsurance
1 Reinsurance is insurance of insurance companies.
2 It helps insurers reduce risk exposure.
3 Reinsurance spreads large risks among insurers.
4 It improves financial stability of insurance companies.
5 Reinsurance increases underwriting capacity.
6 Functions include risk sharing and loss control.
7 Facultative reinsurance covers specific risks.
8 Treaty reinsurance covers all risks of a class.
9 Proportional reinsurance shares premium and loss.
10 Non-proportional reinsurance covers excess loss.
4. Different Types of Life Insurance
1 Life insurance provides protection against death risk.
2 Term insurance provides coverage for fixed period.
3 Whole life policy covers entire lifetime.
4 Endowment policy provides maturity and death benefits.
5 Money back policy gives periodic returns.
6 ULIP combines insurance and investment.
7 Joint life policy covers two lives together.
8 Children policy secures child's future.
9 Group insurance covers a group of people.
10 Life insurance ensures financial security.
5. Need of Insurance
1 Insurance provides financial security against risks.
2 It protects individuals from unexpected losses.
3 Insurance helps in risk sharing.
4 It provides peace of mind.
5 Insurance supports family after death of breadwinner.
6 It encourages savings and investment.
7 Insurance helps business continuity.
8 It promotes economic stability.
9 Insurance provides compensation for losses.
10 It is essential for modern life.
6. Bancassurance
1 Bancassurance means selling insurance through banks.
2 Banks act as intermediaries for insurance companies.
3 It provides convenience to customers.
4 Banks earn commission income.
5 Insurance companies get wide customer base.
6 Customers get multiple services at one place.
7 Bancassurance reduces distribution cost.
8 It improves customer trust in insurance.
9 Banks offer life and general insurance products.
10 Bancassurance helps financial inclusion.