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Risk Management: Types of Insurance Essay


Three Type of insurance

Insurance firms aim at covering the losses or other adverse events that may hamper a firm’s ability to meet its goals and objectives. Apart from property insurance, there is life insurance; it covers the lives of the insured persons. In essence, the entire concept of insurance deals with the mitigation of risks for better management of future activities.

Risk management, therefore, is the process of identifying, analyzing, assessing, controlling, minimizing or eliminating unacceptable risks to help in apt management of prospective functions. A plan of this nature entails techniques and strategies that recognize and confront the threats directly. Organizations should strive to have operational and effective risk management strategies to assure insurance companies of their commitments to loss prevention and reduction.

Insurance is an important tool for risk management for individuals and businesses. Even though insurance cannot avoid the occurrence of bad things, it has the capability of transferring the financial consequences of the events to an insurance carrier, thus limiting the financial commitments of the insured firms.

The essay discusses three different types of insurance, namely life, travel, and automobile insurance. To enhance the analysis, the discourse identifies different companies in the United Arabs Emirates (UAE) that offer the types above of insurance. Finally, the paper looks at different types of health insurance and analyzes the ethical standpoint of insurance in general.

Life Insurance

Life insurance covers the lives of persons. Here, the insured pays a determined amount of premium, while the insurer offers a lump-sum payment in case the insured dies. This type of insurance has two broad categories – whole life and term insurance. Whole life insurance is calculated to cover the entire life of the insured. In its permanent basis, it entails an investment fund as well as a cover for an insured’s life.

Term insurance has no investment category as in whole life option. In this option, an insured purchases a policy for a specific period with an already determined monthly premium. In the UAE, several firms have come up to offer this type of insurance. Some of the major players in this industry include American Life Insurance Company, Alliance Insurance, Oman Insurance Company, and Abu Dhabi National Insurance Company (ADNIC).

Since its establishment in 1975, OIC, with its headquarter in Dubai has expanded to 15 branches; it remains one of the leading providers of insurance solutions in the UAE. OIC provides varied packages of suitable life insurance policies comprising of endowment insurance; unit-linked plans, critical illness, and term insurance (Life Insurance: Oman Insurance Company, 2014).

The critical illness is a stand-alone product covering 40 key illnesses. The Lifeplus package under critical illness offers the insured the much-required peace of mind for family members, as well as assist in quick recovery from critical illness.

Automobile Insurance

Automobile insurance covers vehicles by meeting costs that are connected with auto accidents. The firms offering this type of insurance determine a certain amount of premiums for vehicle owners on an annual basis such that in case of vehicle damages, the insurance company meets the total costs. Also, this type of insurance assumes the risk of loss that the vehicle may cause to persons in case of accidents.

Just like in other types of insurance, the two parties have to agree on the content of the coverage policy. In this package, there are different coverage touching on medical, liability, and property. OIC, ADNIC, AIG, and Emirates Insurance Co. (RSC) are some of the companies offering this type of insurance in the UAE. Emirates Insurance has divided this type of insurance into three main categories.

Third Party Only (TPO) is a category that covers financial losses incurred by the policyholder’s car on the third party. In a single accident, the company gives coverage of approximately DH 500,000 (Emirates Insurance Co. (PSC): Motor Insurance, 2014). Lastly, Comprehensive Car Insurance insures losses incurred to a third party’s vehicle, as well as damages caused to third parties.

With assets of more than AED 1.5 billion, the company is one of the longest formed insurance firms in the UAE (Emirates Insurance Co. (PSC): Motor Insurance, 2014). This pioneer insurance firm was integrated in 1982 and is listed at the stock market of Abu Dhabi.

Travel Insurance

The last type of insurance is the travel option. This type covers those traveling locally or internationally. Besides, it covers financial losses caused by suppliers while on transit, cancellations of trips, and medical expenses. Just like all other types of insurance, this type tries to cover the costs and decrease the risk incurred in events unexpectedly. Markedly, the cost of insurance varies depending on the conditions of the destination.

For example, when traveling to high-conflict regions or regions prone to bad weather, an insurance company will charge high premiums. AIG and AXA travel insurance offers this type of insurance to travelers. The American International Group, Inc. (AIG), for instance, aims at making travelers feel comfortable and have peace of minds during their journeys. Its comprehensive travel insurance package covers trip cancellation, loss of luggage, and medical expenses (AIG Travel Insurance UAE Plans: Travel Guard Insurance, 2014).

The company’s Travel Guard offers its services worldwide, making it provide a global protection policy, uncomplicated claim procedure, as well as online purchases.

This global insurance firm enjoys a presence in over 130 countries worldwide. AIG has comprehensive policy packages that suit the needs of individuals and businesses. As a way of remaining relevant and gaining a competitive advantage over its competitors in the dynamic market, the company consistently develops new services and products (AIG Travel Insurance UAE Plans: Travel Guard Insurance, 2014).

Type of Health Insurance

According to Money Essentials: Types of health insurance (2014), managed care and indemnity plans are the two forms of health insurance. Under indemnity insurance, the insured has the option to choose the laboratory or hospital she/he needs to receive assistance. However, the insured has to part with Lara ger amount of money for health care services than in the managed care option. This type covers only accidents and illness at an agreed fee.

Managed care, on the other hand, have low costs; it has a preferred provider organization (PPOs), health maintenance organization (HMO), and a point-of-service plan (POS) that helps lower its prices with the specified hospitals, laboratories, and doctors having contracts with the insurance company.

Ethical Standpoint of Insurance

Different ethical issues have come up in the manner insurance firms handle health reports of the insured. Notably, the option of informing family members or not has attracted varied opinions (Fulda & Lykens, 2006). With people viewing insurance as an essential product, a sound financial plan, and a product bought on trust, it is imperative for persons in this industry to maintain customer focus, reduce red tapes, and offer effective leadership in order to maintain the publics’ trust in the industry (Van Wyhe, n.d.).

References

AIG Travel Insurance UAE Plans:Travel Guard Insurance. (2014, November 10). Retrieved from https://www.aig.ae/travel-insurance_3739_479299.html

Emirates Insurance Co. (PSC): Motor Insurance. (2014, October 27). Retrieved from http://www.eminsco.com/pro-motor.html

Fulda, K. G., & Lykens, K. (2006). Ethical Issues in Predictive Genetic Testing: A Public Health Perspective. Journal of Medical Ethics, 32(3), 143-147.

Life Insurance: Oman Insurance Company. (2014, August 24). Retrieved from http://www.tameen.ae/en/for-individuals/life-insurance

Money Essentials: Types of health insurance. (2014, October 23). Retrieved from http://money.cnn.com/magazines/moneymag/money101/lesson16/index2.htm

Van Wyhe, P. (n.d.). Ethics in Insurance. Retrieved from http://www.insurancece.com/insuranceResourcesDetails.asp?article=Ethics+in+Insurance&aid=112&id=4

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Gonzalez, D. (2020, March 22). Risk Management: Types of Insurance [Blog post]. Retrieved from https://ivypanda.com/essays/risk-management-types-of-insurance/

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Gonzalez, Dayana. "Risk Management: Types of Insurance." IvyPanda, 22 Mar. 2020, ivypanda.com/essays/risk-management-types-of-insurance/.

1. Dayana Gonzalez. "Risk Management: Types of Insurance." IvyPanda (blog), March 22, 2020. https://ivypanda.com/essays/risk-management-types-of-insurance/.


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Gonzalez, Dayana. "Risk Management: Types of Insurance." IvyPanda (blog), March 22, 2020. https://ivypanda.com/essays/risk-management-types-of-insurance/.

References

Gonzalez, Dayana. 2020. "Risk Management: Types of Insurance." IvyPanda (blog), March 22, 2020. https://ivypanda.com/essays/risk-management-types-of-insurance/.

References

Gonzalez, D. (2020) 'Risk Management: Types of Insurance'. IvyPanda, 22 March.

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