RISK AND
INSURANCE
Ø Perils:
peril refers to specific events which might cause a loss.
·
Perils are risk being
insured against.
·
Loss arising out of
peril can be loss of life or loss of property
Ø Hazard:
hazard is a condition that either increases the chance that a peril will happen
or may cause its effects to be worse, if it does.
Ø Hazards
can be categorized as physical hazard and moral hazard
·
Physical hazard refers
to dimensions and physical
characteristics of the risk.
·
Moral hazard refers to
habits and activities of the individual that increases the risk
Ø Some
hazards that would cause an individual to be categorized as high risk are
·
Risky job profile
·
Existing medical
condition
·
Life style of
individual
·
Imposing restrictions
on the sum assured
·
Term or a lien etc
