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BUSINESS SERVICES 91 allowed to make any profit, by selling business. Broadly speaking, insurance the damaged property or in the case of may be class ified as follows: lost property being recovered. Life Insurance (vi) Contribution:Asperthisprinciple itistherightofaninsurerwhohaspaid Since life itself is uncertain, all claim under an insurance, to call upon individuals try to assure themselves other liable insurers to contribute for of a certain sum of money in the future the loss of payment. It implies, that in to take care of unforeseen events or case of double insurance, the insurers happenings. Individuals in the course are to share the losses in proportion to of their life are always exposed to some the amount assured by each of them. kind of risks. In case there is a loss, when there The risk may be of an event which is more than one policy on the same is certain that is death. In that case, property, the insured will have no right what will happen to the other members to recover more than the full amount of the family who are dependent on of his actual loss. If the full amount isa particular individuals income. The other risk may be living too long in recovered from one insurer the right to obtain further payment from the other which an individual may become too insurer will cease. old to earn i.e., retirement. In this case (vii) Mitigation: This principle states also, the earnings will decline or end. that it is the duty of the insured to takendersuchcircumstances,individuals seek protection against these risks reasonable steps to minimise the loss or damage to the insured property. and life insurance companies offer Suppose goods kept in a store house protection against such risks. catch fire then the owner of the goods A life insurance policy was introduced as a protection against should try to recover the goods and the uncertainity of life. But gradually save them from fire to minimise the loss or damage. The insured must its scope has widened and there are behave with great prudence and not various types of insurance policies be careless just because there is an available to suit the requirements of an individual. For example, disability insurance cover. If reasonable care is insurance, health/medical insurance, not taken like any prudent person then annuity insurance and life insurance the claim from the insurance company may be lost. proper. Life insurance may be defined as a contract in which the insurer in 4.5.4 Types of Insurance consideration of a certain premium, Various types of insurance exist either in a lump sum or by other by virtue of practice of insurance periodical payments, agrees to pay to companies and the influence of legal the assured, or to the person for whose enactments controlling the insurance benefit the policy is taken, the assured Reprint 2026-27