international student life

international student

Types of insurance, policies and functions.

Stock insurance and Mutual insurance. Products include Life insurance, property and casualty, whole life, term life, Universal life insurance and annuities.

Insurance companies are a major component of the world financial industry. Insurance industry comprises life, Casualty, property, surety, pension funds and health policy brokerage.

The basic function of insurance companies is to collect premiums from policy holders, invest the premiums and return some of that investment to policy holders through dividends, annuities and policy payments.

They also reimburse policy holders for qualifying events like death, illness, disability, loss of property and medical treatment.

Insurance companies make profits by carefully balancing the money they put in reserves(for paying policy claims) versus the money they invest. If for example they put too much money in reserves, they lose potential investment growth and may have to raise premiums to stay profitable.

They however also need to have a minimum amount in reserve to be able to pay for unexpected high number of claims from say a natural disaster.

Insurance companies are owned by two types of entities. There are those owned by stockholders , and are known as Stock insurance . There are then those owned by policyholders and are called Mutual insurance.

Property and Casualty insurance include homeowners, auto, theft insurance and workers compensation insurance.

Life insurance policies offer many services although their main purpose is to offer benefits to the policyholders heirs in case of their death.

Whole life policies require the policyholder to pay premiums during the life of the policy. They provide payment to policyholders heirs when the policyholder dies. They also have a cash value that can be accessed by the policyholder.

Universal life policies offer flexible death payments and premium payment. They also have a cash value option tied to the returns of the money market rates.

Other insurance policies include Variable life policies that offer same death payments as above policies but also have investments in money market and mutual funds.

Term life insurance offer guaranteed death benefits for a specified amount of years. There is also Group life insurance that is offered by companies to their employees and is renewable every year.

Annuities are insurance contracts that provide supplemental retirement income and can make many payments to the policy holder beginning any time of their choosing as long as they pay the premiums.