| 1. |
What is
Insurance? |
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Insurance is a legal contract between two parties
whereby one party called insurer / underwriter undertakes
a fixed amount of liability on the happening of
a certain event. The other party called insured
pays in exchange a fixed some called premium.
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| 2. |
What
is Reinsurance? |
|
Where insurance companies spreads their risk by
an arrangement with other underwriters or reinsurance
companies, it is called reinsurance.
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| 3. |
What is Premium? |
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Premium is the fixed amount of sum paid over
the period by insured to insurer in order to secure
an insurance policy and to complete the contract
of insurance.
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| 4. |
What
is unearned Premium? |
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Unearned premium is that portion of the original
premium for which protection has not yet been provided
because the policy still has some time to run before
expiration. A property and liability insurer must
carry unearned premium as a liability on its financial
statement.
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| 5. |
What is Deductible
? |
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In a policy , the amount which must first be subtracted
from the total damage incurred before determining
insurance company's liability. Deductible are the
portion which insured has to bear in all cases,
having a deductible clause in the policy..
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