Advantages And Disadvantages Of Private Insurance

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Insurance is a federal subject in India. It is a subject matter of solicitation. The legislations that deal with insurance business in India are Insurance Act, 1938 and Insurance Regulatory & Development Authority Act (IRDA), 1999. Insurance is defined as is a form of risk management primarily used to hedge against unforeseen risks of contingent losses. Another approach to Insurance is as the equitable transfer of risks, or the possibility of occurrence of losses, from one entity to another, by the method of diversification in exchange for a premium. An Insurer is a company designing, promoting and selling insurance products and services amongst the public. An insured or policyholder is the person or entity purchasing these products and services.…show more content…
The inherently antagonistic relationship between insurance companies and consumers is the “core problem” with insurance, but there is more. Imagine a retail organization that could somehow force every single person within the selling area to buy their product. With insurance, on the other hand, certain kinds of insurance are mandatory. It is against the law to own and operate a car without insurance. If the mortgage is greater than a certain percentage of the value of the house, so is Private Mortgage Insurance. Aside from the fundamental unfairness of mandatory insurance, when purchase becomes mandatory rather than voluntary, costs are likely to become inflated. Furthermore, when something is covered by mandated insurance, the costs of repair and replacement become inflated. People charge more because it is covered by insurance. How many people who have suffered fender bender auto accidents haven’t noticed overpriced estimates from body shops when the work is covered by insurance? In other words, most purchase decisions are based upon perceived value – the trade-off between the quality of the most desirable benefits and the price paid for those
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