What are the features and Types of Commercial Insurance?

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Commercial insurance Features

Business Insurance

Commercial insurance refers to the form of insurance that operates through the conclusion of insurance contracts and is operated for the purpose of profit and is operated by specialized insurance companies. A commercial insurance relationship is contractual. The insured pays the insurance premium to the insurance company according to the contract, and the insurance, or When the insured dies, is disabled, sick, or reaches the agreed age and time limit, it shall be liable for the payment of insurance benefits. The so-called social insurance refers to the collection of insurance premiums and the formation of social insurance funds, which are used to provide basic living security for members who have lost their ability to work or lost job opportunities due to old age, disease, maternity, disability, death, and unemployment. a social security system.

1. The main body of commercial insurance is commercial insurance companies.

2. The insurance contract.

3. The objects of commercial insurance can be people and things (both tangible and intangible), and the specific objects are people’s life and body, property, and property-related interests, responsibilities, credit, etc.

4. The operation of commercial insurance should be aimed at making profits, and it is necessary to obtain the maximum profit to ensure that the insured enjoys the greatest degree of economic security.

Insurance points 

  1. Property insurance
  2. Life insurance
  3. Health insurance

1. Property insurance

Property insurance includes motor vehicle insurance, enterprise property insurance, family property insurance, ship insurance, liability insurance, guarantee insurance, cargo transportation insurance, agricultural insurance, engineering insurance, credit insurance, etc.

2. Life Insurance and Health Insurance

1. According to the number of insured persons, it can be divided into individual health insurance and group health insurance.

2. According to the length of the insurance period, it can be divided into short-term health insurance and long-term health insurance. The length of the insured period is also combined with the number of insured persons to form group short-term insurance and group long-term insurance, and the same combination with individuals can constitute individual short-term insurance and individual long-term insurance.

3. According to the classification of insurance liability a) Illness insurance refers to the insurance that pays insurance benefits based on disease, that is, as long as the insured suffers from a disease listed in the insurance clause, regardless of whether or how many medical expenses are incurred, the insurance can be obtained Fixed compensation. b) Medical insurance, also known as medical expense insurance, refers to insurance that compensates the insured for the expenses incurred when receiving medical services. c) Disability insurance, also known as income loss insurance, income protection insurance, refers to a kind of insurance in which income, property, etc. are lost due to the loss of workability of the insured.

4. According to the classification of loss, it can be divided into medical expense insurance, disability income loss insurance, and long-term care insurance.

5. Classification according to the payment method

a) Expense-based insurance: The insurer will compensate the insured for all or part of the medical expenses based on the reasonable medical expenses incurred by the insured in the process of medical diagnosis and treatment, as stipulated in the insurance contract.

b) Subsidy-type insurance (fixed-payment insurance): Subsidy-type insurance refers to the insurance that pays the insurance money according to the standard stipulated in the insurance contract regardless of the actual expenses of the insured.

c) Provision of service-oriented products: During the provision of such products, the insurer directly participates in the management of the medical service system. The insurer selects medical service providers (hospitals, clinics, doctors) according to certain criteria, and organizes the selected medical service providers to provide medical services to the insured. There are strict and formal operating rules to ensure the quality of services, the use of medical services is frequently reviewed, and the insured can enjoy economic benefits when looking for a designated medical service provider for treatment according to the prescribed procedures.

There are existing links between social insurance and commercial insurance:

Functionally, both are social risk mitigation mechanisms.

Social insurance is the main body of the multi-level social security system. Commercial insurance can be used as a supplement to social insurance and is an integral part of the multi-level social security system. The emergence of social insurance is later than that of commercial insurance, and many of the terms, calculations, and prediction methods it uses are related to commercial insurance.

social insurance

Social insurance refers to the compulsory implementation of the state through legislation and is jointly funded by laborers, enterprises (employers), our communities, and the state to establish an insurance fund to protect laborers due to old age, industrial injury, disease, childbirth, disability, unemployment, death. A social due to other reasons.

It has the function of guaranteeing the basic life of workers, maintaining social stability, and promoting economic development.

It has the following characteristics:

1. Security: refers to the protection of the basic life of workers.

2. Universality: Social insurance covers all social workers.

3. Mutual aid: Use the joint force of the insured to help someone who encounters risks, help each other, and meet urgent needs.

4. Mandatory: limited by national legislation, mandatory for employers and employees to participate.

5. Welfare: Social insurance is a government action, not for profit.

Difference from Social Insurance

The main differences between commercial insurance and social insurance are:

1. Commercial insurance is a kind of business operation. Insurance operators aim to pursue profits, conduct independent accounting, operate independently, and take responsibility for their own profits and losses: social insurance is a kind of national social security system, the purpose is to provide people with basic living security, and the national Backed by financial support.

2. Commercial insurance is based on the principle of equality and voluntariness, and it is entirely up to the insured to decide whether to establish an insurance relationship: while social insurance is mandatory, all citizens or workers who meet the statutory conditions, pay insurance premiums and receive protection are directly governed by national legislation. Specified.

3. The coverage of commercial insurance is determined through negotiation between the policyholder, the insured, and the insurance company. Under different insurance contracts and different types of insurance, the coverage and level of coverage received by the insured are different, while the coverage of social insurance is generally As stipulated in advance by the state, the scope of risk protection is relatively narrow and the level of protection is relatively low. This is determined by its social security nature.

Social insurance is social, and the insured has the right to permanent protection. The government bears the final responsibility for the insurance finance, and the loss is made up by the state financial appropriation.

4. Objects and functions are different. Social insurance targets workers and their immediate family members, and provides material assistance after workers lose their ability to work; commercial insurance targets individuals or all people, and provides certain premiums based on the amount of premium they pay and the type of accident. Financial compensation.

5. There is a difference between rights and obligations. Social insurance emphasizes that workers must perform their obligations to contribute to society, and thus obtain the right to social insurance benefits, and realize basic equality of rights and obligations; commercial insurance is mainly manifested as “more insurance, less insurance”, etc. price exchange relationship.

6. The level of protection and the scope of legislation vary. Social insurance is based on the protection of the basic living needs of workers, while commercial insurance is based on the premiums paid for the insurance; social insurance focuses on security, while commercial insurance focuses on “repayment”; social security belongs to the scope of labor legislation, while commercial insurance belongs to the scope of economic legislation.

7. The management system is different. Social insurance is centrally led by the central or local government, organized and managed by professional institutions, and belongs to the administrative leadership system; commercial insurance is a relatively independent economic entity that operates independently and belongs to the financial system.

Difference from policy insurance

To reflect certain national policies, such as industrial policies, international trade policies, etc., the state usually uses the national finance as the backing to organize some not-for-profit insurances, which are operated by companies invested and established by the state, or commercial insurance companies The risks covered by these insurances are generally high in loss, but they charge lower premiums. If the operator suffers operating losses, the state finance will compensate. This type of insurance is called policy insurance.

Common policy insurances include export credit insurance and agricultural insurance. Commercial insurance companies usually do not actively operate policy insurance for profit maximization.

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