No matter what form of insurance, in terms of its natural attributes, it can be summarized as follows: insurance is an act of gathering many units and individuals with similar risks to provide insurance economic security to a few members who suffer economic losses due to risk accidents in the form of reasonable risk sharing.
(2) narrow insurance
Usually what we call insurance is insurance in a narrow sense, that is, commercial insurance. The Insurance Law of People's Republic of China (PRC) clearly points out that the insurance mentioned in this law refers to the commercial insurance behavior in which the applicant pays the insurance premium to the insurer according to the contract, and the insurer bears the compensation liability for the property losses caused by the possible accidents agreed in the contract, or when the insured dies, suffers from disability, illness or reaches the age and time limit agreed in the contract.
Insurance is an economic form to establish the economic relationship between the two parties in the form of a contract, and to compensate or pay the losses caused by disasters and accidents by paying insurance premiums within the scope stipulated in the insurance contract, thus establishing an insurance fund.
Insurance is one of the oldest risk management methods. In an insurance contract, the insured pays a fixed amount (premium) to the insurer. The former is guaranteed: within a specified period, the latter will compensate for any loss caused by a specific event or a group of events.
Insurance belongs to the economic category, which reveals the essence and essence of insurance.
In essence, insurance embodies an economic relationship, which is manifested in:
(1) Commodity exchange relationship between insurer and insured.
(2) Income redistribution between the insurer and the insured.
From an economic point of view, insurance is a way of loss sharing. Most units and individuals pay premiums to establish insurance funds, so that the losses of a few members are shared by all the insured.
Legally speaking, insurance is a kind of contractual behavior, that is, by signing an insurance contract, the rights and obligations of both parties are clarified, and the insured obtains compensation within the scope stipulated in the insurance contract by paying the premium, while the insurer has the right to accept the premium and the obligation to provide compensation.
Therefore, insurance is the unity of economic relations and legal relations.
Insurance has the functions of economic compensation, financial intermediary and social management, which are an organic whole. The function of economic compensation is the basic function, and it is also the most remarkable feature that distinguishes insurance from other industries. Financial intermediary function is developed on the basis of economic compensation function, and social management function is an important function after the insurance industry has developed to a certain extent and penetrated into many aspects of social life. It can only play a role after the economic compensation function and financial intermediary function are realized.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.