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Meaning And Importance of Non Life Insurance

Meaning And Importance of Non Life Insurance

Non - Life Insurance is also called General Insurance, which includes automobile and homeowners policies. 

It provides payment depending on the loss from a particular financial event. Non- Life Insurance typically comprise any insurance that is not determined to be Life Insurance.

Non - Life insurance is also called property and casualty Insurance in the U.S. and canada and same non life insurance in continental Europe.

Non - Life Insurance is basically an insurance policy to protect an individual against losses and damages other than those covered by Life Insurance. 

The coverage period for most non - life insurance policies and plans is usually one year, whereby premiums are normally paid on a one time basis.

The risk that are covered by non - life Insurance is Property loss (stolen car or burnt house), liability arising from damage caused by an individual to a third party, accidental death or injury. 

meaning and importance of non life insurance

What are the products of non - life Insurance?

The main products of non - life Insurance includes 
  • Motor Insurance
  • Fire/house Insurance
  • House holder Insurance
  • Personal Accident Insurance
  • Medical and Health Insurance
  • Travel Insurance

Importance of Non - Life Insurance

Insurance also acts as a risk reduction mechanism in various senses. Firstly, the individual risks have been shifted to the insurance company by way of pooling.

Secondly, firm's risk exposure is well spread out because insurer has an access to the reinsurance market making possible a further spread of risk.

After transmitting risks and uncertainties of the business to the insurance company, the entrepreneur can focus on his core activity - of running the business.

 Also, the insurance companies bring their experience and expertise to the field of risk management.

Thus, they are able to add value to the customer's business processes.

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