Health insurance policy is a contract between an insurer and an individual or group, in which the insurer agrees to provide specified health insurance at an agreed upon price (premium).

1. Whole Life Policy
2. Endowment Life Policy
3. Joint Life Policy
4. Annuity Policy
5. Children's Endowment Policy

IRDAI - Insurance Regulatory Development and Authority is the statutory, independent and apex body that governs, regulates and supervises the Insurance Industry in India. It was constituted in the year 2000 by Parliament of India Act called IRDAI Act, 1999. Presently IRDAI headquarters is in Hyderabad.

"Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risk that attaches to individuals" - According to John Magee.

Causes of Business Risks:
Business risks arise due to a variety of causes, which are classified as follows :
(i) Natural Causes:
(1) Human beings have little control over natural calamities like flood, earthquake, lightning, heavy rains, famine, etc.
(2) These result in heavy loss of life, property, and income in business.
(ii) Human Causes:
Human causes include such unexpected events like dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, strikes, riots, management inefficiency, etc.
(iii) Economic Causes:
(1) These include uncertainties relating to demand for goods, competition, price, collection of dues from customers, change of technology or method of production, etc.
(2) Financial problems like rise in interest rate for borrowing, levy of higher taxes, etc., also come under this type of causes as they result in higher unexpected cost of operation of business.
(iv) Other Causes:
These are unforeseen events like political disturbances, mechanical failures such as the bursting of boiler, fluctuations in exchange rates etc. Which lead to the possibility of business risks.

Principles of Insurance:
Insurance concept was started to distribute risk among group or people. Co-operation is the basic principle behind every Insurance contract. The following are the important principles of Insurance.
a) Utmost Good Faith:
1. According to this principle, both insurer and insured should enter into contract in good faith.
2. Insured should provide all the information that impacts the subject matter.
3. Example: Mr. M is a heart patient. But he hides this fact to the LIC while taking a life policy. On his death due to a heart attack, LIC can refuse to pay compensation to his legal representative because a material fact was not disclosed by the insured.
b) Insurable Interest:
1. The insured must have an insurable interest in the subject matter of insurance.
2. Insurable interest means some pecuniary interest in the subject matter of the insurance contract.
3. The insured must have an interest in the preservation of the thing or life insured, so that they will suffer financially on the happening of the event against which they are insured.
4. Example, a businessman has insurable interest in his stock of goods.
c) Indemnity :
1. Indemnity means security or compensation against loss or damages.
2. In insurance, the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss.
3. "The principle of indemnity is not applicable to life insurance because one cannot estimate the loss due to the death of a person".
d) Causa Proxima:
1. The word 'Causa proxima' means 'nearest cause'.
2. According to this principle, when the loss is the result of two or more cause, the proximate cause, i.e. the direct.
3. The direct, the most dominant and most effective cause of loss should be taken into consideration.
4. The insurance company is not liable for the remote cause.
e) Contribution:
1. The same subject matter may be insured with more than one insurer then it is known as 'Double Insurance'.
2. In such a case, the insurance claim to be paid to the insured must be shared on contributed by all insurers in proportion to the sum assured by each one of them.
3. Example: A businessman gets his factory insured against fire for Rs 10,00,000 with insurer A and Rs. 5,00,000 with insurer B.
4. Due to fire, a loss of Rs 1,50,000 occurred.
5. Then, insurers A and B will contribute the loss in the ratio of 2:1.
6. A will pay Rs. 1,00,000 and B will pay Rs. 50,000.
f) Subrogation:
1. Subrogation means 'stepping the shoes on others'.
2. According to this principle,once the claim of the insured has been settled, the ownership right of the subject matter of insurance passes on to the insurer.
3. Example Mr.B gets his motor car insured. Some of its parts got damaged in a road accident.
4. He gets the insurance claim and gets the damaged parts replaced with new ones.
5. In this case the damaged parts will be taken by the insurance company.
6. The insured has no right over the damaged parts since they had already got compensation for the damaged parts.
g) Mitigation:
1. In case of a mishap, the insured must take off all possible steps to reduce or mitigate the loss or damage to the subject matter of insurance.
2. This principle ensures that the insured does not become negligent about the safety of the subject matter after taking the insurance policy.

Types of Insurance:
Insurance covers different types of risks. All contracts of insurance can be broadly classified as follows:
i. Life Insurance (or) Life Assurance
ii. Non-life Insurance (or) General Insurance
It can be further classified into:
i. Fire Insurance
ii. Marine Insurance
iii. Health Insurance
iv. Miscellaneous Insurance.
a) Life Insurance:
Life Insurance may be defined as a contract in which the insurance company called insurer undertakes to insure the life of a person called assured in exchange of a sum of money called premium which may be paid in one lump sum or monthly, quarterly, half yearly or yearly and promises to pay a certain sum of money either on the death of the assured or on expiry of certain period.
Importance of Life Insurance:
i. Life insurance provides protection to the family at premature death of an individual.
ii. It gives adequate amount at an old age when earning capacities are reduced.
iii. Life insurance is not only a protection but is a sort of investment because a certain sum is returnable to the assured at the time of death or at the expiry of a certain period.
b) Non-Life Insurance:
It refers as the insurance not related to human but related to properties. .
i) Fire Insurance:
Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by a fire during a specified period upto the amount specified in the policy.
ii) Marine Insurance;
Marine insurance is a contract of insurance under which the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. The insured pays the premium in consideration of the insurer's (underwriter's) guarantee to make good the losses arising from marine perils or perils of the sea.
iii) Health Insurance:
In mid 80's, most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care, the need for Health Insurance was felt and various Insurance Companies introduced Health Insurance as a Product. Presently the health insurance exists primarily in the form of 'Mediclaim policy'.