Mutual Insurance Companies Definition

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Mutual Insurance Companies Definition – In everyday life, men face various problems. Even though he may be a genius, it is impossible for him to predict all the disasters that are in store and deliver them in advance.

Many happy lives are destroyed due to sudden death of family members or many calamities such as flood, fire, earthquake, war, accident, etc., can have a great impact on people’s lives.

Mutual Insurance Companies Definition

These effects cannot be known in advance when they will prevail, and it is impossible for the body to prepare against them.

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Insurance is the risk of not preventing these risks but reducing their severity to people. Insurance is defined as a cooperative tool to spread the loss caused by a certain risk to many people who are exposed to it and agree to insure these risks.

Risk is the uncertainty of financial loss. This should not be confused with probability of loss which is the amount of possible loss for a given amount of loss.

Finally, risk should not be confused with the loss itself, which is the unanticipated decrease or loss of value resulting from the problem.

Risk is the uncertainty of financial loss. This should not be confused with the probability of loss, which is the number of possible losses and the number of losses that will occur.

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It should not be confused with “risk”, which is defined as a cause of harm, or “risk”, which is defined as something that can increase the risk of harm.

Insurance is a collective tool to spread the loss caused by a certain risk to many people who are exposed to it and agree to cover the risk.

Insurance is a tool that helps spread the loss caused by an individual or his family among many people, each of whom pays on their behalf and feels protected against a large loss.

Insurance is defined as a form of risk management which is basically insurance where money is paid as a premium to cover the risk of paying a certain amount of money over a period of time.

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The details can be given as follows “Insurance can be defined as a party (the insured) who agrees to pay, to the other party (the insured) or the beneficiary, a certain amount for a certain amount (risk); insurance is sought.”

It is clear that all risks are related to one or another type of loss.

People who are exposed to certain risks share less of those risks each time they occur.

Such a risk is not avoided, but the members share the loss when it occurs. The following example will show the importance of this fact.

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The legal definition focuses on contracts where one party agrees to pay another

Financial statements provide an explanation for damages In contrast, legal statements provide for legally enforceable contracts that describe the rights, obligations and responsibilities of all parties to the contract.

All risks are related to one form or another type of loss.

These risks cannot be avoided, but the losses caused by certain risks can be divided between the parties

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They agree to share the loss because the probability of losing, that is, the time, the number of people is unknown. Any person can bear the given loss, so the rest will share the loss

In fact, the loss they share in paying the premium is calculated for potential bankruptcy.

Insurance is defined as a social instrument that provides money to the insured to cover an unknown loss caused by a certain risk.

From the above information, we can see the following, which are common in life, marine, fire and general insurance.

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Insurance is a tool to cover the financial loss that can happen to a person or their family in the event of something happening.

Life insurance, marine peril in the case of marine insurance, fire in the case of fire insurance, and certain general insurance items, for example, theft in the case of theft, car insurance accident, death of a family member. , etc. Losses arising from these events, if insured, are shared by all policyholders in the form of premiums.

An important feature of an insurance system is the cooperation of many people who agree to share the financial loss caused by a certain risk to the insured.

Such a group may be assembled voluntarily or through promotion or recruitment

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The insurer will not be able to cover all the losses from its own funds. Therefore, it can cover the losses in the insurance or write a large number of people.

Risks are assessed before the insurance is charged to the insured’s share, here called, consideration or premium. There are many ways to assess risk

If there is a large loss expected, more money can be paid. Therefore, the probability of loss is calculated during the insurance period.

Since the life insurance contract is a guaranteed contract, since the emergency, death, or expiration will be inevitable, the payment is guaranteed. Other insurance policies may cover fire or marine perils etc

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Then, if an extraordinary situation occurs, the payment is made. Otherwise, no amount is paid to the owner.

For example, in term insurance, payments are made when the insured dies within a specified period, perhaps a year or two.

Similarly, in premiums, payments are made during the term of the insurance after the end of the term

Another characteristic of insurance is contingency A serious loss is not sudden and unexpected and occurs as a result of chance In other words, the loss must be accidental

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For example, a person may fall on a snowy road and break their leg.

The amount of payment depends on the value of the loss due to the specific risk insured if the insurance reaches that amount In the case of life insurance, monetary loss is not fixed The insurer promises to pay a certain amount in case something happens

If an event or emergency occurs, the payment fails. If the policy is valid and in effect at the time of the event, unlike property insurance, the insured is not required to prove that there has been a loss and the amount of loss. .

In the case of life insurance, how much is the loss in case of emergency But in the case of property and general insurance, the amount of loss and occurrence of loss should be seen

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To spread the loss quickly, efficiently and cheaply, a large number of people must be relied on. Cooperation of a few people can also be relied on, but it will be limited to a limited time.

So, it can be unclear Therefore, to make the insurance cheaper, it is important to insure more people or properties because renters insurance will cost, so the premium will be lower.

In past years, mutual funds or fire insurance companies used to share losses at a lower cost. To be effective, insurance must be paid by a large number of people

Insurance is a risk management technique used mainly to prevent the risk of financial loss. Insurance is defined as the transfer of equal risk of loss in terms of payment and coverage.

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Absolute risk is the loss or loss of the game that is impossible, such as fire, death of an important person, bankruptcy of the customer and so on.

Risks can result in profit or loss, such as buying land with the assumption that the value will decrease due to certain factors.

Physical effects are the result of economic, political, social or natural forces acting on society. Some sources of primary hazards are floods as well

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