Insurance facts for kids
Insurance is a term in law and economics. It is something people buy to protect themselves from losing money. People who buy insurance pay a "premium" (often paid every month) and promise to be careful (a "duty of care"). In exchange for this, if something bad happens to the person or thing that is insured, the company that sold the insurance will pay money back. (However, there are some times when the company will not have to pay money back, such as if the person was not careful.)
Types of insurance
There are different kinds of insurance. There are life insurance and general insurance.
In life insurance, someone ensures their life or someone else's life. At the death of insured person or on the date of maturity whichever happens earlier, the amount insured will be paid.
General insurance is a non-life policy, such as:
- fire insurance
- marine insurance
Actuaries
Actuaries are the people who figure out how much the premium should be. They balance how much the insurer might have to pay out against the chances of having to pay out. If an actuary thinks that there is a big chance that the company will have to pay out, he will make the premium higher.
Images for kids
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An advertising poster for a Dutch insurance company from c. 1900–1918 depicts an armored knight
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Merchants have sought methods to minimize risks since early times. Pictured, Governors of the Wine Merchant's Guild by Ferdinand Bol, c. 1680.
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Lloyd's Coffee House was the first organized market for marine insurance.
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Leaflet promoting the National Insurance Act 1911.
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A wrecked vehicle in Copenhagen
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Workers' compensation, or employers' liability insurance, is compulsory in some countries
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Amicable Society for a Perpetual Assurance Office, Serjeants' Inn, Fleet Street, London, 1801
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US Airways Flight 1549 was written off after ditching into the Hudson River
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Hurricane Katrina caused over $80 billion of storm and flood damage
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The demand for terrorism insurance surged after 9/11
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The subprime mortgage crisis was the source of many liability insurance losses
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High-value horses may be insured under a bloodstock policy
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Certificate issued by Republic Fire Insurance Co. of New York c. 1860
See also
In Spanish: Seguro para niños
