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C5: Planning for Uncertainties (insurance) - Coggle Diagram
C5: Planning for Uncertainties (insurance)
definition
insurance is a legal contract that transfers risk from a policyholder to an insurance provider
types of insurance
life insurance
insurance against risks such as premature death, illness, disability and hospitalization
coverage is more than a year
premium payments - monthly, quarterly, semi-annually or annually
term insurance
most basic, generally least expensive - under age 50
typically 1 to 10 years, may be renewable at the end of each term
benefits is payable only if the insured dies/become totally &permanently disable during the policy term
products
whole life
endowment
investment - linked
medical health
mortgage reducing term assurance (MRTA)
general insurance
any insurance other than human lives comes under the scope of general insurance
it is preferable to call this as general insurance instead of non-life insurance
motor
house
travel
personal belonging
purpose of insurance
protection against loss due to hazard and unexpected events
compensation for damages for personal belongings
increased medical bills
living expenses in disability or serious illnes
how does insurance work
insurance company pay for damages due to insured peril up to the limit of sum insured
insurance company sells policies to many people and pool the premium collected into a common fund
the common fund helps to share risk
takaful
basic concepts of takaful
al-mudharabah (profit sharing)
the takaful operator accepts and invest the takaful contributions (premiums) received from the takaful participants. The contract will specify how the profit will be shared between the participants and takaful operator
al-takaful joint (guarantee)
the participants jointly guarantee amongst themselves. Any member faced with a calamity will be financially compensated from funds contributed by the participants
tabarru (donation)
each participants agrees to relinquish a portion of the takaful contribution to a common fund that is used to pay a member that suffers a loss
family takaful
individual/family
retirement annuity
investment link
medical health
general takaful
home
motor
personal accident
information to consider before buying insurance policy
understand about the type of policies
carefully assess what you need to protect
decide how much you want to insure - the level of coverage
compare *insurance companies and their policies
ensure to buy insurance through an agent appointed by a licensed insurance company
making a claim - under what situation & how to make claims