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Unforeseen Protection: Understanding the Vital Role of Insurance

Learn about the significance of insurance, how it works, types, and the duties of agents. Discover the importance of insurance in unforeseen events and risks, providing financial support in times of need. Delve into the concepts and functions of insurance, essential for individuals, entrepreneurs, employers, and students alike.

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Unforeseen Protection: Understanding the Vital Role of Insurance

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  1. CHAPTER 1 INTRODUCTION TO INSURANCE

  2. OBJECTIVES: • IMPORTANCE OF INSURANCE • HOW DOES INSURANCE WORKS • FUNCTIONS OF INSURANCE • CLASS OF INSURANCE • AGENTS’ DUTIES

  3. INTRODUCTION OF INSURANCE • INDIVIDU • Unexpected event of unfortunate • Eg Sudden death of breadwinner – left behind his wife and children suffering from two kind of misery i.e emotional and financial. • ENTREPRENEUR • Unexpected loss of business • Eg The factory was damaged in the flame due to no income will generate and will burden another extra expense.

  4. EMPLOYER • Loss the job and directly loss the income due to company bankruptcy. • STUDENT • The parents passed away in the accident, the eldest child will drop from the school because want to take care of younger sibling- give a chance to the younger to study and get a better life.

  5. Answer for all the unexpected and unlucky events : BETTER PLAN to overcome the financial loss due to unfortunate events such as dead or flame is via INSTITUTION OF INSURANCE

  6. IMPORTANCE OF INSURANCE • THE NEED FOR INCOME • SOURCES OF INCOME • UNFORTUNATE EVENTS OR RISKS PHOTO OF INSURANCE.pptx

  7. HOW DOES INSURANCE WORK? • POOLING OF LOSSES • Purpose : to take care of the importance of insurable person/individual • Pay compensate to those who are UNFORTUNATE!!! • COMPENSATE is obtained from the premium paid by a group of people who are exposed to the same class of risk • YouTube - How Does Insurance Work-.flv

  8. Homeowner policy • CONCEPT OF INSURANCE • refer to the below diagram Premium #1 #2 #3 #999 #1000 RM 200 RM 200 RM 200 RM 200 RM 200 Claim Insurance Fund 1000 X RM 200 = RM 200 000 Contribution of Premium Expenses/ outgoes Profit

  9. FUND WILL BECOME DEFICIT • Based on the above situation, fund was formed just adequate to pay two maximum claim only • This means that insurer’s expense and other outgoes do not count. • If there is two claims, the insurance fund does not enough and insurer will loss in this portfolio

  10. PREMIUM MUST ADEQUATE TO COPE WITH THE CHALLENGING BUSINESS ENVIRONMENT • TO PROFITABLY OPERATE IN THE COMPETITIVE ENVIRONMENT, THE INSURER MUST STATE THE ADEQUACY PREMIUM AND CONTROL ADMINISTRATIVE EXPENSE AND ETC.

  11. LAW OF LARGE NUMBER • Insurans – saturancanganbgmenyebarkankerugiansegelintirdikalanganygramaihanyaakanberjayaapabila insurer2 bolehmengunderaitkansebilanganbesarrisikoygsama. • Apbl insurer2 bolehmengunderaitsebilanganbesarrisikoygsama, peraturanbilanganjumlahbesaroperasi. • Peraturanbilanganjumlahbesarmenjelaskaniaituapabilajumlahkerugianterdedahbertambah, ramalankerugianmenghampirikerugiansebenar.

  12. SEBILANGAN BESAR RISIKO TERDEDAH KPD KERUGIAN YANG SAMA • KERUGIAN TERDEDAH MESTILAH BEBAS DR YG LAIN • KEMUNGKINAN TERJADI KERUGIAN ADALAH SECARA RAWAK Jumlahbil.besarhanyabolehberoperasijika faktor2 berikutdipenuhi:-

  13. DEFINITION OF INSURANCE • INSTITUSI EKONOMIK BERASASKAN PRINSIP BERSALING DIBENTUKKAN BAGI TUJUAN MENUBUHKAN DANA AM. • KEPERLUANNYA TIMBUL DRPD BERLAKUNYA RISIKO YANG TIDAK DIDUGA YANG KEBARANGKALIAN BERLAKUNYA BOLEH DIANGGARKAN DENGAN MUNASABAH

  14. ESSENTIAL FEATURES OF INSURANCE Insuransadalahinstitusiekonomik Insuransberasaskanprinsipbersalingataukerjasama Objektifinsuransialahuntukmengumpuldanabagimembayartuntutanakibatberlakunya risiko2 tertentu Hanyarisikotertentusahajabolehdiinsuranskan

  15. FUNCTION OF INSURANS PRIMARY FUNCTION SECONDARY FUNCTIONS STABILIZATION OF COST STIMULATION OF BUSINESS ENTERPRISE PROVISION OF SECURITY FOR BUSINESS EXPANSION REDUCTION OF LOSSES PROVISION OF A MEAN OF SAVING PROVISION OF SOURCES OF CAPITAL FOR INVESTMENT PROVISION OF EMPLOYMENT FOR MANYA • EQUITABLE DISTRIBUTION OF THE FINANCIAL LOSSES OF FEW WHO ARE INSURED AMONG THE MANY INSURED

  16. CLASSES OF INSURANCE

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