Types and Principle of Commercial Insurance.

Business insurance

Commercial insurance refers to the form of insurance that operates through the conclusion of insurance contracts and is operated for the purpose of profit and is operated by specialized insurance companies. A commercial insurance relationship is contractual. The insured pays the insurance premium to the insurance company according to the contract, and the insurance, or When the insured dies, is disabled, sick, or reaches the agreed age and time limit, it shall be liable for the payment of insurance benefits [1]. The so-called social insurance refers to the collection of insurance premiums and the formation of social insurance funds, which are used to provide basic living security for members who have lost their ability to work or lost job opportunities due to old age, disease, maternity, disability, death, and unemployment. a social security system.


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Commercial insurance (3 photos)

1. The main body of commercial insurance is commercial insurance companies.

2. The insurance contract.

3. The objects of commercial insurance can be people and things (both tangible and intangible), and the specific objects are people’s life and body, property, and property-related interests, responsibilities, credit, etc.

4. The operation of commercial insurance should be aimed at making profits, and it is necessary to obtain the maximum profit to ensure that the insured enjoys the greatest degree of economic security.

Insurance points 

  • Property insurance
  •  Life insurance
  • Health insurance

1. Property insurance

Property insurance includes motor vehicle insurance, enterprise property insurance, family property insurance, ship insurance, liability insurance, guarantee insurance, cargo transportation insurance, agricultural insurance, engineering insurance, credit insurance, etc.

2. Life Insurance and Health Insurance

1. According to the number of insured persons, it can be divided into individual health insurance and group health insurance.

2. According to the length of the insurance period, it can be divided into short-term health insurance and long-term health insurance. The length of the insured period is also combined with the number of insured persons to form group short-term insurance and group long-term insurance, and the same combination with individuals can constitute individual short-term insurance and individual long-term insurance.

3. According to the classification of insurance liability

 a) Illness insurance refers to the insurance that pays insurance benefits based on disease, that is, as long as the insured suffers from a disease listed in the insurance clause, regardless of whether or how many medical expenses are incurred, the insurance can be obtained Fixed compensation. 

b) Medical insurance, also known as medical expense insurance, refers to insurance that compensates the insured for the expenses incurred when receiving medical services. 

c) Disability insurance, also known as income loss insurance, income protection insurance, refers to a kind of insurance in which income, property, etc. are lost due to the loss of workability of the insured.

4. According to the classification of loss, it can be divided into medical expense insurance, disability income loss insurance, and long-term care insurance.

5. Classification according to the payment method

a) Expense-based insurance: The insurer will compensate the insured for all or part of the medical expenses based on the reasonable medical expenses incurred by the insured in the process of medical diagnosis and treatment, as stipulated in the insurance contract.

b) Subsidy-type insurance (fixed-payment insurance): Subsidy-type insurance refers to the insurance that pays the insurance money according to the standard stipulated in the insurance contract regardless of the actual expenses of the insured.

c) Provision of service-oriented products: During the provision of such products, the insurer directly participates in the management of the medical service system. The insurer selects medical service providers (hospitals, clinics, doctors) according to certain criteria, and organizes the selected medical service providers to provide medical services to the insured. There are strict and formal operating rules to ensure the quality of services, the use of medical services is frequently reviewed, and the insured can enjoy economic benefits when looking for a designated medical service provider for treatment according to the prescribed procedures.

There are existing links between social insurance and commercial insurance:

Functionally, both are social risk mitigation mechanisms.

Social insurance is the main body of the multi-level social security system. Commercial insurance can be used as a supplement to social insurance and is an integral part of the multi-level social security system. The emergence of social insurance is later than that of commercial insurance, and many of the terms, calculations, and prediction methods it uses are related to commercial insurance.

social insurance

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Social insurance refers to the compulsory implementation of the state through legislation and is jointly funded by laborers, enterprises (employers), our communities, and the state to establish an insurance fund to protect laborers due to old age, industrial injury, disease, childbirth, disability, unemployment, death. A social due to other reasons.

It has the function of guaranteeing the basic life of workers, maintaining social stability, and promoting economic development.

It has the following characteristics:

1. Security: refers to the protection of the basic life of workers.

2. Universality: Social insurance covers all social workers.

3. Mutual aid: Use the joint force of the insured to help someone who encounters risks, help each other, and meet urgent needs.

4. Mandatory: limited by national legislation, mandatory for employers and employees to participate.

5. Welfare: Social insurance is a government action, not for profit.

Difference from Social Insurance

The main differences between commercial insurance and social insurance are:

1. Commercial insurance is a kind of business operation. Insurance operators aim to pursue profits, conduct independent accounting, operate independently, and take responsibility for their own profits and losses: social insurance is a kind of national social security system, the purpose is to provide people with basic living security, and the national Backed by financial support.

2. Commercial insurance is based on the principle of equality and voluntariness, and it is entirely up to the insured to decide whether to establish an insurance relationship: while social insurance is mandatory, all citizens or workers who meet the statutory conditions, pay insurance premiums and receive protection are directly governed by national legislation. Specified.

3. The coverage of commercial insurance is determined through negotiation between the policyholder, the insured, and the insurance company. Under different insurance contracts and different types of insurance, the coverage and level of coverage received by the insured are different, while the coverage of social insurance is generally As stipulated in advance by the state, the scope of risk protection is relatively narrow and the level of protection is relatively low. This is determined by its social security nature.

Social insurance is social, and the insured has the right to permanent protection. The government bears the final responsibility for the insurance finance, and the loss is made up by the state financial appropriation.

4. Objects and functions are different. Social insurance targets workers and their immediate family members, and provides material assistance after workers lose their ability to work; commercial insurance targets individuals or all people, and provides certain premiums based on the amount of premium they pay and the type of accident. Financial compensation.

5. There is a difference between rights and obligations. Social insurance emphasizes that workers must perform their obligations to contribute to society, and thus obtain the right to social insurance benefits, and realize basic equality of rights and obligations; commercial insurance is mainly manifested as “more insurance, less insurance”, etc. price exchange relationship.

6. The level of protection and the scope of legislation vary. Social insurance is based on the protection of the basic living needs of workers, while commercial insurance is based on the premiums paid for the insurance; social insurance focuses on security, while commercial insurance focuses on “repayment”; social security belongs to the scope of labor legislation, while commercial insurance belongs to the scope of economic legislation.

7. The management system is different. Social insurance is centrally led by the central or local government, organized and managed by professional institutions, and belongs to the administrative leadership system; commercial insurance is a relatively independent economic entity that operates independently and belongs to the financial system.

Difference from policy insurance

To reflect certain national policies, such as industrial policies, international trade policies, etc., the state usually uses the national finance as the backing to organize some not-for-profit insurances, which are operated by companies invested and established by the state, or commercial insurance companies The risks covered by these insurances are generally high in loss, but they charge lower premiums. If the operator suffers operating losses, the state finance will compensate. This type of insurance is called policy insurance.

Common policy insurances include export credit insurance and agricultural insurance. Commercial insurance companies usually do not actively operate policy insurance for profit maximization.

business entity

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Commercial insurance is an economic modern market economy. The purpose of the commercial insurance business is to make profits, but from the perspective of the whole society, the social function of commercial insurance business operators is to reduce risks. A service of an organization, management, calculation, research, payment, and supervision. Since the insurance business directly operates monetary capital, it is also a financial service.

At the same time, the insurance business involves the interests of many insureds, insureds, and beneficiaries. If the commercial insurance business operators operate improperly and cannot pay the insurance, it will not only cause the insured, the insured, and the beneficiaries to suffer from insurance damage. The damage caused by the accident cannot be compensated, and it will lead to social conflicts and instability. Therefore, to protect the social and public interests, the law needs to regulate the establishment, management, investment, and termination of business operations of commercial insurance business entities. To ensure the smooth progress of this social wealth redistribution. The long-term practice of insurance activities also requires that the main body of commercial insurance business should implement the principle of professional operation, that is to say, the commercial insurance business can only be operated by specific commercial organizations that meet the conditions stipulated by law.

From the perspective of insurance, professional operation is an important principle for countries to supervise the insurance industry by the law. For example, the insurance laws or insurance industry supervision laws of Japan, Germany, South Korea, and Taiwan Province of China stipulate that the main body engaged in commercial insurance It must be a company limited by shares or a legally established mutual insurance company. The above-mentioned insurance companies can only conduct business activities within the approved insurance business scope, and shall not engage in other business operations other than insurance business. China’s Insurance Law draws on the user experience of foreign insurance industry supervision and management and combines the actual situation in China with the Company Law that has already been implemented. This article clearly stipulates that the business insurance business must be an insurance company established by this Law. Other units and individuals are not allowed to operate commercial insurance businesses. This clarifies the principle of professional operation in China’s insurance industry. Only insurance companies established by the law have the qualifications to operate commercial insurance businesses.

The operation of the commercial insurance business is to raise and use insurance, collect insurance premiums, underwrite risks, establish insurance funds, and use insurance funds to perform indemnity responsibilities. Value preservation and appreciation to enhance solvency. Therefore, the commercial insurance business requires a high degree of specialization and requires strong capital, business personnel proficient in insurance expertise, a strict corporate organizational form, and a strict. Liability for Compensation for Losses. An insurance company shall adopt the following organizational forms:

1. limited liability company;

2. Sole state-owned company. That is to say, in addition to these two specific forms of insurance companies, other forms of enterprises. No organization or group may operate a commercial insurance business. Restricting the business entities of commercial insurance business to insurance companies established by this Law, and prohibiting other entities and individuals from operating commercial insurance business, is conducive to protecting the lawful rights and interests of policyholders, insureds, and beneficiaries, and maintaining the normal order of the insurance market, and effectively play the role of insurance protection.

purchase principle

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The principle of commercial insurance is based on the principles of fairness, reasonableness, and risk-sharing. When applying for insurance, the physical health of the insured is a standard insurance company.

The following points should be kept in mind when purchasing commercial insurance:

1. The purchase should be carried out in the following order: first, accident insurance ( life insurance with additional accidental medical treatment, hospitalization, etc.); secondly, health insurance (mainly major diseases and additional medical insurance, term life insurance ); thirdly, pension insurance (dividend, annuity, investment, etc.) even, etc.).

2. Many consumers tend to buy insurance for their children first. Professionals suggest that priority should be given to those with higher family income (he is the backbone of the entire family); secondly, women have relatively more diseases, so they can consider purchasing this type of insurance. “Life is Beautiful” product; consider children last. Of course, if the economic conditions are acceptable, a family of three should buy together. To prevent the unexpected and in case of life risks to the family.

3. The choice of the insured amount should be based on the total family income and the risk (such as whether to drive, whether there is social insurance, town insurance, etc.). The important reference indicator here is 5%-15% of the family’s total annual income to pay premiums is more appropriate. It is generally recommended that the insured amount should not exceed 100,000 yuan for those under the age of 18, 200,000 yuan for 20-year-olds, 100,000 yuan for each additional 10-year-old thereafter, and 500,000 yuan for 50-year-olds. If you feel that the premium is expensive, you can add a relatively cheap term life insurance product to the purchase.

4. The payment method is determined according to various factors such as the consumer’s family economic situation and the operation of cash flow assets and funds. It is not that the longer the payment period, the more cost-effective it is. If you have a high sum insured, you must obtain the consent of the life insurance underwriting of the insurance company and the reinsurance agreement of the reinsurance company, and can only apply for insurance after passing the medical examination.

Question 1: How much should household premiums be spent?

In general, the family insurance premium should be 10%-20% of the family’s annual income. The premium should not be too high. Excessive premiums will cause pressure on family life. You can also increase or decrease it according to your personal consumption habits!

Question 2: What is the appropriate amount of protection?

The amount of insurance should be closely related to the annual income. If the amount of insurance is too low, it will not play a role in guaranteeing. Generally, it is 5-10 times the annual income.

“Insurance is not guaranteed to be as high as you want.” If a person with an annual income of 20,000 yuan wants to insure 500,000 yuan, then the insurance company will doubt whether there will be a moral hazard in it. The customer will be insured.

Compulsory insurance

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On July 1, 2006, along with the implementation of compulsory motor vehicle traffic accident liability insurance, the Insurance Association of China launched three sets of industry commercial auto insurance products, A, B, and C, including vehicle loss insurance and commercial three-way insurance. The operation results of the auto insurance market in the second half of 2006 show that the introduction of industry clauses has a positive effect on reducing the difficulty for policyholders to understand insurance clauses, protecting the interests of policyholders and the insured, and promoting the standardized development of the auto insurance market. To further play the role of industry products, effectively safeguard the interests of consumers, improve the market environment, and solve new situations and new problems in operation, the Insurance Association of China has established a project team for the development of auto insurance industry terms. Based on the 2006 version of industry products, After revision and expansion, a new version of auto insurance industry terms was finally developed.

It is reported that the new version of the auto insurance industry terms further expands the coverage, covering vehicle loss insurance, commercial three-party insurance, vehicle liability insurance, theft, and rescue insurance, special insurance without deductible rates, individual glass breakage insurance, body scratch loss insurance and Optional 8 types of insurance including deductible special insurance; the new version of the industry products are still three sets of A, B and C, the coverage, rate structure, rate level, and rate adjustment coefficient are basically the same, but slightly different; the new version of the auto insurance industry The terms are combined with the actual operation. For the content that is not clear in terms of terms and easy to cause disputes in practice, the text has been revised and improved to make the terms and conditions more rigorous and easy to understand, which is not only convenient for policyholders to understand, but also for various insurance companies Company standard operation. At the same time, the new version of the industry terms simplifies and standardizes the rate adjustment coefficient, realizing further connection with compulsory traffic insurance, and restoring the true role of the rate adjustment coefficient in reflecting the real risks of consumers.

In the next step, the insurance regulatory authorities will take the introduction of the auto insurance industry clauses as an opportunity to further strengthen the supervision of market behavior, supervise the strict implementation of industry products by insurance companies, and deal with irregularities such as fee reductions, abuse of rate adjustment coefficients, and misleading consumers. , will increase the penalties, promote the smooth implementation of the terms of the auto insurance industry, guide the standardized operation of the auto insurance market, and realize the sound and rapid development of the auto insurance business.

Relevant authoritative persons said that the revision and launch of the new version of the auto insurance industry terms is another deepening reform of the commercial auto insurance product management system, an in-depth promotion of the standardized product system and operation mechanism of commercial auto insurance, and further development of the commercial auto insurance product management system and supervision. Innovation plays a positive role in safeguarding the interests of consumers, standardizing operations, simplifying procedures, facilitating insurance applications, optimizing claims settlement, and improving the operation and management level of the auto insurance business of insurance companies. Both consumers and insurance companies will benefit from it, and the majority of policyholders and insureds will undoubtedly become the biggest beneficiaries. Insurance companies operating commercial auto insurance businesses may choose to use auto insurance industry clauses or develop auto insurance clauses independently and may develop supplementary auto insurance products and other featured auto insurance products based on auto insurance industry clauses.

medical insurance

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With the reform of the medical system, the commercial medical insurance types of major insurance companies have also adapted to the situation and gradually increased. Then, by 2012, what are the major types of insurance for commercial medical insurance, what are they insured, which are not insured, and what are the specific regulations when applying for insurance? Below is a brief overview of the types of health insurance coverage:

general medical insurance

This type of insurance is the most extensive type of insurance liability in medical insurance and is responsible for outpatient medical expenses and inpatient medical expenses incurred by the insured due to illness and accidental injury. General medical insurance is generally underwritten by a group or as an additional liability of individual long-term life insurance. Generally, medical insurance and each maximum amount are specified.

Accidental injury medical insurance

This type of insurance is responsible for the medical expenses incurred by the insured due to accidental injury as an additional liability to accidental injury insurance. The amount of insurance can be the same as the basic insurance, or it can be agreed otherwise. Generally, medical insurance benefits are paid in the form of compensation, which not only stipulates the insurance amount, that is, the payment limit, but also stipulates the treatment period.

hospital medical insurance

This type of insurance is responsible for the medical expenses incurred by the insured when the insured needs hospital treatment due to illness or accidental injury, and is not responsible for the outpatient medical expenses of the insured.

Surgical Medical Insurance

This type of insurance belongs to single medical insurance and is only responsible for the medical expenses incurred by the insured due to the operation, whether it is an outpatient surgical treatment or an inpatient surgical treatment. Surgical medical insurance can be covered separately or as an addition to accident insurance or life insurance. Surgical medical insurance paid in the form of compensation only stipulates the insurance surgical medical insurance with a fixed payment, the insurance company only pays the medical insurance premium according to the type of surgery performed by the insured.

Special Sickness Insurance

This type of insurance takes the insured person suffering from a specific disease as the insured event. When the insured is diagnosed with a specific disease, the insurer pays insurance to meet the financial needs of the insured. A special disease insurance policy can cover only one specific disease, or it can cover several specific diseases. It can be insured separately or as additional insurance of life insurance. Generally, a fixed payment method is adopted. The insurer pays the insurance money in one lump sum according to the insured amount, and the insurance liability is terminated.

Difference from social health insurance

First, the two properties are different. Commercial medical insurance is a kind of insurance operated by life insurance companies using economic compensation. It is an aspect of social and economic activities. It is realized by signing contracts between the insurer and the policyholder according to the principle of voluntariness, and the life insurance company can make profits from it. Social medical insurance is a social security system established by the state by the Constitution to protect and improve the health of employees . It is enforced by the state or local governments through legislation and does not depend on individual will. Profitable nature.

Second, the objects and functions of insurance are different. Commercial medical insurance takes natural persons as the insured object, and its function is that when the insured citizen pays medical expenses due to accidental injury or disease, he can obtain certain economic compensation to reduce the loss, not to protect the basic life of the insured, nor to protect the insured. It has the function of maintaining social equity. Social medical insurance mainly targets workers. When workers pay medical expenses due to illness, the social insurance department or its entrusting unit will provide basic compensation, which is conducive to social stability and the maintenance of society. Equity is actually an aspect of the redistribution of national income.

Again, the rights and obligations of the two are different. The rights and obligations of commercial medical insurance are based on the contractual relationship. Any citizen or legal person with full capacity, as long as he voluntarily signs an insurance contract with an insurance company and pays insurance premiums, he or his member can obtain the corresponding insurance. The right to claim insurance payment, the amount of insurance depends on the number of insurance premiums paid, that is, the relationship between the rights and obligations between the insurance company and the insured is a reciprocal relationship of equivalent exchange, which is manifested as more investment. More insurance, less insurance, less insurance, no insurance, no insurance. The rights and obligations of social medical insurance are based on labor relations. As long as workers fulfill their obligations to work for society, they can enjoy social medical insurance benefits. Sometimes, to facilitate management by economic means and enhance workers’ awareness of expenses, They are required to pay a small number of insurance premiums, but the insurance benefits they receive are not proportional to the number of insurance premiums paid, that is, the relationship between rights and obligations is not equal.

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