Chapter 2 Insurance and Risk.pptVIP

Types of insurance Government insurance: Social insurance Social insurance programs are financed entirely or in large part by mandatory contributions from employers, employees, or both, and not primarily by the general revenues of government. Types of insurance Government insurance: Social insurance Major social insurance programs include the following: Old-age insurance Medical insurance Unemployment insurance Workers compensation Maternity insurance Benefits of insurance to society Indemnification for loss Reduction of worry and fear Source of investment funds Loss prevention Enhancement of credit Benefits of insurance to society Indemnification for loss Indemnification permits individuals and families to be restored to their former financial position after a loss occurs. Indemnification to business firms also permits firms to remain in business and employees to keep their jobs. Benefits of insurance to society Reduction of worry and fear Worry and fear are reduced both before and after a loss. Benefits of insurance to society Source of investment funds The insurance industry is an important source of funds for capital investment and accumulation. Benefits of insurance to society Loss prevention Insurance companies are actively involved in numerous loss-prevention programs and also employ a wide variety of loss-prevention personnel, including safety engineers and specialists in fire prevention, occupational safety and health , and products liability. Benefits of insurance to society Loss prevention Some important loss-prevention activities that property and casualty insurers strongly support include the following: Highway safety and reduction of automobile deaths Fire prevention Reduction of work-related injuries and disease Prevention of auto thefts Prevention and detection of arson losses Prevention of defective products that could injure the user Prevention of boiler explosions Education programs on loss prevention Benefits of insurance to society Enhancement