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Summary NSC purple business book - grade 12 notes $4.39   Add to cart

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Summary NSC purple business book - grade 12 notes

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Business chapter 10 notes



Insurance:


- Insurance covers potential loss
- Gives protection against theft, storm damage ext..


- Insurance can be short term = between insurance company (insurer) and individual or
business insured.

- Insurer will provide compensation for losses suffered
- Insured pays insurance a premium to insurer
- Premium is based on the value of assets at risk


AIM: protection of assets



Assurance:

- Taken out to cover risk that is certain eg: loss of life, retirement - (long term)

AIM: to provide security, covers long term risk

- Policyholder is the person taking out cover
- Beneficiary is the person to whom the policy will pay out


TYPES OF ASSURANCE INCLUDES:


- Life assurance = covers loss of life, policy exists for as long as you are alive and paying
premium

- Term assurance = life cover for a specific period or term, taken to cover a debt period

- Endowment = investment policy paying out after specified time period eg: 10 years

- Retirement annuity (RA) = to provide an income when reaching retirement age, 55-65

, - Disability cover = insured paid out predetermined amount on disability eg: loss of limb

- Trauma cover or dread diseases = policy covering list of serious illnesses eg: cancer

- Funeral cover = to pay funeral costs



Difference between insurance and assurance:



Insurance: Assurance :
- Taken out incase something happens - Taken out for things bound to happen
- Will be put back into first economic - Eg: retirement
position - Long term - death
- Short term risks eg: fire




NON COMPULSORY INSURANCE:

INSURABLE RISKS:

1. Fire insurance = covers damage resulting from a fire to building or stock

- Covers damage from smoke and water used to put out the fire
- Excluded - volcanoes, earthquakes and rots that cause fire
- Premium depends on: Risk and value
- Risk = nature of item or building, flammable, availability of extinguishing agents
- Value - of item
- Insurance contracts have a iron safe clause - forces insufred to keep ser of stock records
in fireporss safe, to have proof of stock before fire


2. Vehicle insurance = 2 options

- Insure vehicle against theft or fire but if insured is responsible it won't be covered
- Fully comprehensive, covers all dage no matter whos is responsible
- Premium depends on value of car and risk involved ( risk is like if i is in a high crime
area)

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