What is insurance? The most basic insurance terms you should know

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Insurance has long been associated with human life, but understanding what insurance is and the concepts surrounding insurance are not well understood.

What is insurance?

Insurance is an activity through which an individual is entitled to an insurance benefit by means of a contribution to himself or to a third person in the event of an accident. This allowance is paid by an organization, which is responsible for all risks and compensates for losses according to statistical methods.

Compulsory insurance is a type of insurance prescribed by law on insurance conditions, premium rates, and minimum insurance amounts that organizations and individuals participating in insurance and insurance enterprises are obliged to perform. .

Voluntary insurance is a type of insurance in which participants have the right to choose an insurance company, insurance product, premium rate and insurance benefits.

Compulsory insurance includes: Civil liability insurance of motor vehicle owners, Civil liability insurance of air carriers for passengers; Professional liability insurance for legal consultancy activities; Professional liability insurance of insurance brokerage enterprises; Fire insurance; Compulsory medical insurance; Compulsory social insurance, the rest are voluntary insurance products.

In addition, on the market, there are many other types of insurance such as commercial and state, subject of insurance is human and property or civil liability…

Insurance products are deployed or sold through insurance enterprises or agencies under the management of the State. For example, the company life insurance deploying products of life insurance , the insurance company nonlife deploy products health insurance, auto insurance, home insurance, travel insurance …, the Vietnam Social Insurance Agency organizes and implements the regimes and policies of social insurance, unemployment insurance, health insurance…

The most basic insurance terms you should know

US Social Insurance is an agency under the Government, having the function of implementing policies and regimes of social insurance and health insurance and managing the Social Insurance Fund in accordance with the law.

Health insurance fund is a financial fund formed from health insurance premiums and other lawful sources of income, used to pay medical examination and treatment expenses for health insurance participants. fees for management of the health insurance organization’s apparatus and other lawful expenses related to health insurance.

The social insurance fund is a financial fund independent of the state budget, formed from the contributions of employees and employers and supported by the State.

The period of payment of social insurance premiums is the time from the time when the employee starts to pay the social insurance premium until the time the payment stops. In case employees pay social insurance contributions intermittently, the period of social insurance payment is the total time of paying social insurance premiums.

Insurance enterprise means an enterprise established, organized and operating in accordance with the Law on Insurance Business.

Insurance agent means an organization or individual authorized by an insurance enterprise on the basis of an insurance agency contract to perform insurance agency activities in accordance with the Law on Insurance Business and other regulations of the Law on Insurance Business. relevant laws.

Insurance agency activities are activities of introducing and offering insurance, arranging for the conclusion of insurance contracts and other tasks in order to perform insurance contracts as authorized by an insurance enterprise.

Insurance buyer is an organization or individual that enters into an insurance contract with an insurance enterprise and pays insurance premiums. The policyholder can be the insured or the beneficiary at the same time.

The insured is an organization or individual whose property, civil liability and life are insured under the insurance contract. The insured can be the beneficiary at the same time.

What is insurance 1

Beneficiary means an organization or individual designated by the insurance buyer to receive the insurance money under the personal insurance contract.

An insurance contract is an agreement between an insurance buyer and an insurance enterprise, whereby the insurance buyer must pay a premium, and the insurance enterprise must pay the insurance premium to the beneficiary or indemnify the insured. in the event of an insured event.

Insurance premium is the sum of money that the insurance buyer must pay to the insurance enterprise according to the time limit and method agreed upon by the parties in the insurance contract.

The sum insured is the amount approved by the insurer and written on the insurance contract to determine the insurance benefits according to the contract’s provisions.

Insurable event means an objective event agreed upon by the parties or prescribed by law that, when such event occurs, the insurer must pay insurance premiums to the beneficiaries or indemnify the insured.

Contract term is a defined period of time for the parties to perform the rights and obligations agreed upon in the contract. This period is counted from the time the contract comes into effect until the time when the grounds for termination of the contract appear.

The insurance liability exclusion clause stipulates that the insurer does not have to compensate or pay to settle insurance benefits when the insured event occurs.

According to Law on Insurance Business, Law Library, Law on Social Insurance, Law on Health Insurance.