Life insurance is a socio-economic system that works on cooperation, solidarity, solidarity and interdependence among the participating members by collecting risks and redistributing them in a sound scientific system to reduce the burden of loss on the individual who inflicts harm.
It is also an organized means of savings that works to develop the individual’s savings, and it is a system that resembles an organized savings system, as its means for the individual to stop paying installments are linked to the provisions and rules of the organization, which makes these savings less vulnerable to risk, and thus life insurance works to develop and strengthen the elements of safety and provide long-term and continuous protection This is what makes it different from saving in a bank or bank.
Life insurances are medium or long-term insurances and the duration of the insurance ranges between ten years or more than thirty years – and it follows that insurance companies must form reserves allocations called arithmetic reserves and these reserves in their entirety consist of huge sums available for medium or long-term investment and therefore The insurance of persons or life insurance has an economic and social importance from the economic point of view, and the insurance sector, such as banks and banks, consists of huge sums of money from the savings of the owners of documents and these funds are available for investment and they play an important role in the country’s economy, where the money of the document holder can be invested in many development purposes, taking into account the actuarial principles. And the principles of insurance and investment rules. The investment of these funds results in profits for the rights of policyholders, which are paid to them over the extension of the insurance period.
These investments are considered to be the rights of policyholders and not the rights of the shareholders. Therefore, the General Authority for Supervision of Insurance Supervision has taken care to set laws and legislations that regulate the foundations and employment of the insured funds – and clarify the investment channels that can be invested in and the rates determined for each type of investment so that these funds are not exposed to the risk of loss .
Life or people insurance works to counter inflation and the lack of purchasing power in the currency, as the profits paid to policyholders compensate the insured for the shortfall that results from the depreciation of the currency.
The importance of people’s insurances is concentrated in the risk factors that result in loss of income due to death, reaching a certain age, or a long or limited period, as is the case in cases of illness, total disability, permanent disadvantage, or any work that an individual can do.
Life insurance is divided into two main parts, namely individual life insurance and group life insurance, and each of these two sections have its own characteristics, types and advantages, but each of them performs the same purpose, which is to provide insurance protection for the individual in the event of income decline or interruption in cases of death, illness, disability or old age, as well as That each of them works to create the financial savings that a person needs in special occasions such as marriages, the performance of school fees, and the payment of medical expenses or illness.
Individual life insurance
Submit is divided into individual life insurances in terms of insurance coverage into two main parts, the first part temporary insurance and the second part the savings insurance.
Temporary life insurances
Its purpose is to compensate the insured in the event of death during the insurance period by spending the amount of the insured insurance. This type of insurance is characterized by a lower premium, and this type has no liquidation value or redemption value and is in its judgment the ruling on insurance against theft or car insurance that ends with the expiry of the policy period and the duration of Insurance in this type is between one year and 30 years old, or when the insured reaches a meaningful age like turning 65 leads, such as 60, 65 or 70 years.
One of the most important types is temporary diminishing insurance, in which insurance begins with a large amount, let it be ten thousand pounds, then decreases annually, and at a sum of one thousand pounds, to reach zero after ten years (for a ten-year document). This type of insurance is suitable as a guarantee for loans in the case of buying a house or car in installments. The policy in this case is to pay the rest of the installments that must be paid to the lender in the event of the death of the insured, and there is another type of temporary insurance, which is temporary increased insurance, where the insurance starts with a small amount, let it be five thousand pounds, and then increases annually at a rate of 1000 pounds, for example .. to reach 25 thousand EGP after 20 years (for a twenty-year policy). This type of insurance is appropriate for cases in which the risk of death at the start of insurance is high (after a surgical operation, for example) and the risk decreases with the continuation of the insurance period.
Savings insurances
Savings insurances and the most popular documents are life and blended insurance. This type of insurance combines insurance and savings and the difference between life insurance and mixed insurance is that mixed insurance has a specific term, let it be 10, 20 years. As for life insurance, it continues throughout the life of the insured, as the amount of insurance is paid in the event of the insured’s death. However, if the insured desires Due to the liquidation of the policy, a refund value can be spent in proportion to the term of the insured and the premiums paid.
As for mixed insurance, the amount of insurance is paid at the end of the insurance period, unless death occurs before the end of the insurance period, so the amount of insurance is due upon death, and the insurance premium for this type of insurance is relatively high and varies from one insurance company to another.
This type is divided into two important main parts – the first section which is the mixed insurance shared in the profits and the second section the mixed insurance that is not shared in the profits – and the difference between these two sections is that the documents issued with sharing in the profits are relatively high premiums because the method of calculating them in actuarial terms depends On the basis of a low interest rate, the company pays dividends to the policyholder in the form of high insurance amounts – and these higher profits depend on the interest rate that the company was able to achieve in investing the insured’s money.
