In the broadest sense, insurance is an activity that guarantees insurance coverage. In a narrow sense, it implements the practical embodiment of a special type of specific relationship between two parties, one of which is the policyholder, and the other is the insurer.
The main goal of such protection is to minimize the consequences of the onset of certain negative events, interpreted as insured events. Today, this industry is a huge industry, without which the existence of many social spheres, as well as production, is unthinkable.
Types of insurance
There are two broad types of insurance that you must be conversant with. They are compulsory insurance and voluntary insurance. But of course, the choice depends on you. These insurances will protect your interests in adverse situations. To insure against risks means taking responsibility for your life yourself.
The main differences in insurance of various forms are such factors as:
• Different amount of insurance coverage provided;
• Various insurance objects.
The state is responsible for the implementation of compulsory insurance through the introduction of certain legislative acts that spell out all the most significant issues. These are, for example, the rights, obligations of the parties, the amount of compensation, etc. Voluntary insurance is the prerogative of not only state-owned but also private companies.
This category is prescribed by law. Compulsory insurance is needed to protect not only your interests but also the interests of others. Take, for example, compulsory civil liability insurance of the car owner. In the event of an accident through your fault, the insurance company will not pay for the repair of the damaged car. This type of insurance applies to both individuals and organizations. So, it is obligatory to insure passengers of any vehicles.
Another example is the environmental liability insurance of enterprises. If the environment or people who live near hazardous production are damaged, insurance will help compensate for it. Similarly, under an annuity agreement, a person who is injured at work and has lost working capacity will be able to receive a pension as compensation.
Also, imputed insurance has recently been launched. It is a type of compulsory insurance in which legislative acts establish the requirement for compulsory insurance, types and minimum conditions of insurance, and other conditions, and the procedure for insurance are determined by agreement of the parties.
Imputed insurance implies social orientation. On the one hand, it removes the financial burden from the state and increases the responsibility of business entities by regulating civil law relations. Besides, it protects the population in case of incidents by paying compensation to the victims. It is assumed that the institution of imputed insurance may cover the areas of voluntary civil liability insurance of producers, owners of catering establishments, shopping centers, restaurants, cafes and shops, elevator organizations, and organizers of public events.
According to the law, the state is obligated to protect the life, health, and property of all citizens if they suffer any harm and damage. This also includes the risk of civil liability that may arise as a result of harm to the life, health, or property of others.
Compulsory insurance protects the interests of society as a whole, and not just of individual citizens. The list of organizations that have the right to carry out this type of activity is defined at the legislative level. Moreover, the main feature is the completeness of coverage, because it is thanks to this that it is possible to use the minimum tariff rates.
Compulsory insurance includes the following types:
• Social insurance is the pension, medical, etc.
• Military insurance;
• Liability insurance of carriers of various modes of transport;
• Deposit insurance (bank) deposits.
At the same time, you need to draw up a policy on your own only in two cases: with medical insurance and with the compulsory motor liability insurance policy. In all other situations, insurance coverage occurs automatically, without the participation of an individual. A citizen has no right to refuse the OS.
2. Voluntary insurance
Voluntary insurance is not a fad, but a real way to protect yourself and your family from risks. It is crucial to choose the right insurance program in your lifestyle. For example, an extreme sports enthusiast will need accident insurance. The owner of the house is real estate insurance. Parents – insurance of children from injuries and illnesses. Business owner – insurance against financial losses.
Voluntary insurance includes the following types:
• Life and health insurance;
• Cumulative (investment);
• Insurance for traveling abroad;
• Voluntary Health Insurance (VMI);
• Real estate and vehicle insurance.
In voluntary health insurance, the contract is concluded between the person and the insurance company. The state does not act as an intermediary.
The purpose of voluntary health insurance is to give people access to services that are not provided under compulsory insurance. For example, cosmetic dentistry. Or complex medical examinations and tests. Also, since 2016 there is oncology insurance. The program covers the treatment of cancer, as well as coronary artery bypass grafting, heart valve replacement, neurosurgery, organ transplantation, and bone marrow.
Another essential type of voluntary insurance is general liability insurance against third parties for harm. Imagine that you flooded the neighbors. They knock indignantly at the door, and you open them without the slightest panic: you have insurance that will allow you to pay for repairs to your neighbors fully.
Voluntary insurance has a deadline, which is prescribed in the documents. Upon request, customers can ensure the continuity of insurance coverage, and extend the contract by renewing it. The frequency and amount of contributions depend on the chosen program. They can be paid monthly, quarterly, or with one payment per year.
In practice, the voluntary is implemented as follows: to the injured person or organization that provides various services for the insured, compensation is paid. Moreover, these funds are taken from special funds that are created from customer contributions.
Voluntary and compulsory (state) insurance do not contradict each other, but rather are complementary. If a person wants to take care of his future and be able to receive quality medical care, then the voluntary policy is his prudent choice.