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Risk and Insurance Coverage - Coggle Diagram
Risk and Insurance Coverage
Risk
Possibility of a disaster that cannot be avoided
Insurance
A contract sign between insurance company &
insurance owner
Policy Holder
Pays a premium
Insurance company
Pays compensation for any
loss incurred
The amount of compensation payable to the policyholder is
only the amount of the loss suffered
Key principle in Insurance system : to restore the
financial position of the policyholder to the preloss
condition known as
principle of indemnity
Insurance principle will not allow the policyholder to
gain profit
from the insurance purchased
Insurance
cannot prevent a loss
from occuring
but
can help reduce financial burden borne
by a
policyholder
in losses & accidents
occurrence
Buying an adequate sum of insurance
removes the uncertainty of financial loss
in the
loss insured
occurrence
Intended to transfer risks from individuals to insurance
organisations
Life Insurance
Guarantees the payment of
a stated amount of monetary benefits to the policyholder upon the death of the insured
or
under other circumstances specified in the contract
The purpose :
to provide financial protection
to
family members
who depend on the
policyholder dies
If the policyholder is
alive but suffers from a total & permanent disability
, the policyholder may
receive compensation
from the insurance company according with the
terms set out in his/her life insurance policy
General Insurance
Provides
coverage against any loss
or
damage incurred
apart from the risk covered by
life insurance
Types
Motor Insurance
Provides coverage against any loss or damage related to the use of motor vehicle
Fire Insurance
Provides coverage against damage caused by
fire, lightning & explosion that occur at home or business premise
Medical and Health Insurance
Medical expenses (hospitilisation & surgery
costs)
Travel Insurance
Protects policyholder
against losses during travel
whether by land, air or sea (death & permanent disability, loss of luggage, passport & money, medical expenses and others)
Personal Accident Insurance
Provides coverage in the occurence that the policyholder suffers a
bodily injury, disability or death resulting from accident
Info Bulletin Risk
Important elements in the definition of risk
i) Risk is unpredictable
ii) Risk involves loss
Group Insurance
Provides coverage to a group of individuals such as
employees in a company
or
pupils in school
&
students in educational institutions
Group Insurance for Organisation
Provided to
employees
of an organisation in the events of
death, disability, hospitilisation & surgery
under
certain policy & coverage limit
Group Insurance for Pupils
Provided to
pupils
in the events of
death, paralysis, disability & wheelchair allowance
under
certain policy & coverage limit
Examples : MOE Malaysia has implemented
a protection scheme
for
pupils of government schools
&
government-aided schools
under the
Takaful Pelajar Sekolah Malaysia (TPSM)
scheme
Info Bulletin Insurance
Insurance Company
The Party that agrees to pay compensation for the losses of the aggreed terms
Policyholder (Insurance owner)
The individual who will claim and receive compensation for the losses
Insurance Contract
A policy and an evidence of an agreement made between the insurance company and the policyholder
Premium
An amount of money payable by the insurance company
Principle of Indemnity
Insurance companies will pay compensation to policyholders in the occurrence of a loss insured for an amount not exceeding the loss incurred, subject to the sum insured
Info Bulletin Life Insurance
Actuary
is
an expert in managing & calculating risks
in premium of insurance policy, annuity rate & others for an insurance company
Info Bulletin General Innsurance
Motor insurance
is a
compulsary insurance
that every motor vehicle in Malaysia must have under the Road Transport Act 1987
Liability
is the
amount of debt that needs to be paid with money, goods or service
Info Bulletin Group Insurance
The
mySalam
national health protection scheme is
an initiative started by the government
which aims to
provide 8 million Malaysian Citizens
with
free takaful protection