Definition, functions, features and purpose of insurance

To begin this article follows with definition, that such insurance. This term implies a specific type of economic relationship, which provides insurance protection to organizations or individuals from hazards of various kinds. In this article, we will consider the functions of insurance, its goals and types.

Essence

As you know, any kind of economic relations carries with it certain risks, because there is always an opportunity to lose your finances. So that's the possible danger and is included in the concept of "risk".

From the economic point of view, the future probability of an event with negative results can be called a risk. It is the unfavorable outcome of risk that is expressed through harm. Many companies and organizations try to receive compensation in case of risk factors in the event that unfavorable conditions have nevertheless come.

It can be concluded that the essence of insurance is the creation of insurance funds, which exist at the expense of contributions of insurance company participants. If an accident occurs, the insurance agency will pay a certain amount of money to the injured party.

The main functions of insurance

Insurance activities, as a rule, do not create anything new. It exists due to the distribution of funds, which are made by the participants of the insurance company.

First of all, insurance performs a distributive function and pays for material compensation in the event of negative risk conditions. It is the distribution function that ensures the process of uninterrupted operation at all stages of insurance.

The risk function is able to provide material protection against various negative random events that lead to material losses. Each insurance participant makes certain contributions that will not be returned to him after the end of the current contract.

Insurance also performs a preventive function. Its implementation is carried out by reducing the degree of risk and the bad consequences of any insurance event. This function will be implemented due to the funding of funds in the funds for measures to prevent, limit and localize the bad consequences of accidents, accidents or accidents. In order to be able to realize this function, it is necessary to create a special insurance fund.

Insurance also performs a savings function. This indicates that the participants of the insurance fund will have the opportunity to save the amount for survival by means of insurance. This type of savings was caused by the need to protect the already achieved family wealth.

The investment function allows the participants of the insurance, if there are free amounts, to invest them in the fund of the insurance organization and make profit at the expense of the activity of this company.

Insurance also performs a credit function. It is about the return of insurance premiums.

Control function is the formation of the right fund and the targeted use of incoming funds.

Purpose of insurance

The main purpose of insurance is to protect the persons forming the insurance fund. The more people were able to attract the company, the more capital it has. So, the purpose of insurance is to meet the social need for quality and reliable insurance protection against all kinds of negative accidents.

If you take into account the macroeconomic position of insurance, its purpose can also be called accumulation of money that was paid by participants of the insurance fund, as well as investing these funds in the economy. Correctly chosen purpose of insurance and will be able to determine its effectiveness. In order to give a quantitative estimate, it is possible to use the coverage of insurance coverage of clients exposed to risks, as well as the secured insurance level for each of these risks.

Compulsory insurance

The purpose of compulsory insurance is the possibility of ensuring compensation for harm, which was caused during transportation to the property and health of passengers. At the same time, it does not matter which transport and type of transportation were used. In this case, common insurance conditions have been created for all clients, as well as a condition for the payment of funds to the injured.

Compulsory insurance exists on the principle of guarantee of compensation for damage received during transportation on any means of transport. All insurance payments are made at the expense of insurance compensation or at the expense of compensation established by the law of the Russian Federation. In this case, the amount of damage caused and the way it is recovered is determined regardless of which transport was used.

Social insurance

The main task of social insurance is financial support for those categories of insured persons who, due to certain circumstances, have lost their ability to work.

Therefore, there are such social insurance goals:

• Ensuring the payment of temporary benefits for the disabled category of the population;
• Payment of cash to disabled persons due to certain types of diseases;
• Payments on generic certificates;
• Providing cash payments to mothers who take care of young children;
• Financial support that provides concessional persons during the sanatorium-resort treatment;
• Payment of material benefits at the birth of the baby;
• Also social assistance to disabled people in the acquisition of prosthetic structures, rehabilitation equipment and invalid equipment.

The state determines the objectives of compulsory social insurance. This is done to help the disabled group of people.

There is a decipherment of expenses for the purpose of compulsory social insurance. This document must be filled out for persons who want to receive social insurance from the state. If you belong to the disabled category of the population, then the state will help you.

Health insurance

This type of insurance is the main form of protection of the population in health protection.

Medical insurance is a collection of several types of insurance that provide full or partial payments to insured persons for various medical services.

The main goal of medical insurance is to guarantee citizens the right to receive medical assistance in cases of getting diseases, due to the funds accumulated by the fund.

Pension insurance

Pension insurance is the material security of citizens in the event of retirement age. This type of insurance can be of two types: state and non-state.

The first of these is fully guaranteed by the state, and the order of getting passes full legal control, and the second can be concluded in a wide variety of options, taking into account all the nuances.

The goals of pension insurance are to guarantee a decent standard of living for people of advanced age. Ideally, the difference in the receipt of funds during working and retirement time should not be much palpable.

Principles of insurance

Like any other type of activity, insurance has its own principles. So, very important is the principle of equivalence, which should consist in observing a balance between expenses and incomes of the insurance company. Of course, risks can threaten very many people, but in fact, not all of them lead to the occurrence of an insured event.

Insurance payments for each case will be made only at the expense of contributions of other participants of this organization who could avoid insurance risk.

For the insurance is also inherent in the principle of randomness. This suggests that only those events that are inherent in the sign of probability and randomness can be insured.

Tasks of insurance

The purpose and objectives of insurance involve the activity of the insurance organization itself. The main tasks will be the mandatory availability of certain factors, namely:

• Provision of social protection to the insured layers of the population, as well as mandatory implementation of all payments specified in the contract;
• Participation in supporting the financial stability of the health care system;
• Protection of interests related to the preservation of property of legal entities and individuals.

For the proper implementation of all set goals and objectives, each insurance company is controlled by government agencies.

Basic types of insurance

As stated above, the purpose of insurance is to protect individuals who take part in the creation of an insurance fund. In this case, the goal remains unchanged with any method of insurance.

Consider what types of insurance exist:

1. Personal . In this case, the insurance object is personal interests related to health, life, work capacity and pensions. This includes life insurance, accidents and medical insurance.
2. Property . In this case, we are talking about the existence of property interests related to the use and possession of a certain property. This includes insurance against fires, natural disasters, as well as damage to property.
3. Liability insurance . Here, the insurance object will be considered responsibility before other citizens or organizations. This kind of insurance will serve as a reliable protection against potential harm to health or property belonging to other citizens or organizations.
4. Entrepreneurial risks . Property is considered to be property interests, which are related to the compensation of losses or unearned income while doing business. This includes deposit insurance, non-payment risk, financial guarantees, export credits.

conclusions

In order to succeed in any kind of activity, you need to consider what risks you may be accompanied. A properly selected insurance company will provide you with reliable protection.