basic characteristics of insurance | NON-INDEMNIFICATORY CHARACTER OF THE INSURANCE OF PEOPLE

 

NON-INDEMNIFICATORY CHARACTER OF THE INSURANCE OF PEOPLE;

                       

characteristics-of-insurance

                We observed the different qualifications that the legislator grants to the insured benefits in the case of damage insurance or in the case of personal insurance.

               In the first case, there is talk of the obligation to compensate the damage and in the case of personal insurance, on the contrary, to satisfy a capital, an income, or other agreed benefits.

                If we oppose insurance for damages and personal insurance, it can be concluded that the essential element of insurance against damage to the insured interest. The insurance against damages are void if at the time of its conclusion there is no interest of the insured in compensation for the damage."

 Then, without interest, there is no damage insurance.

We can say that the interest is the economic expression of the relationship that the insured has with an asset, be it a thing, a right, or an estate. Hence the distinction, in damage insurance, between the insured and insured property, contrary to what happens in personal insurance in which the insured is also the "good" that is insured.

             The importance of the existence of the interest insured in damage insurance is clear since without it cannot exist. But it is also that the objective measure of this interest is what determines the amount of compensation.

            The module, therefore, for determining the damage to be compensated, is the interest.

               Then, the correct relationship between the insurable value (the value of the interest) and the insured value (the insured sum), depends on whether the insurance can exactly fulfill its compensation function.

              This mechanism only occurs in damage insurance,                              in which there is a prior and objective evaluation of the interest that the property has in the insured.

               By contrast, in personal insurance, the insured interest is not given, in the objective sense that it has in damage insurance. There is a subjective need of the insured that he can figure financially? The same event, death, can produce very different economic needs depending on the insured person in question.

                  Here, the benefit is not related to an objective interest, but with the needs that the insured person estimates that his beneficiaries will have in the event that he dies, or himself if he lives at a certain age or becomes disabled. 

             While in damage insurance you cannot insure twice the same thing (if this were done, over insurance would be produced, and the compensation would have the interest limit), on On the other hand, in personal insurance, multiple contracts can occur at the same time.

                      In conclusion, there is no interest in personal insurance objectively assessable nor, therefore, compensation. There is simply a determination of a sum or a service to be provided by the insurance company in the cases covered by the contract.     

              This general principle that occurs in personal insurance has an exception. In some health care coverage, the insurer does pay the cost of an assessable interest:

                                                                                  Medical, hospital, and pharmacy bills in case of illness, when this is the benefit insured in the policy. This is actually an exception to the general principle that we have stated.    

               On the other hand, personal accident insurance, which covers between others, the risk of injury in its different degrees, it is at least doubtful whether it should have this qualification or rather that of damage insurance, with an indemnity content.   

                              Indeed, the insurance falls on the human person, and this in this sense, is clearly personal insurance, but it is also true that the insurable interest is in this case determinable a priori.

                                    Accident insurance seems to be somewhat intermediate between damage insurance and personal insurance, and the statement of whether it belongs to one or the other classification can be resolved in a different way by the legislator and therefore is strictly positive law.

                   The dominant thesis in legal doctrine is that insurance accident, whatever the consequences of the accident, there should always be damage insurance. From the conceptual point of view, indeed, there is no doubt that the accident is always a harmful event and that the human body, as a thing, can be the object of interests susceptible to value.

                     However, given that, in practice and in positive law, the Accident insurance does not repair the damage but rather satisfies a capital or other previously agreed lump sum benefit, regardless of the real economic consequences that the loss produces, it must be concluded that the accident insurance benefits have a non-compensatory nature and can be classified within personal insurance. This is how we have considered it in this work.

 

           OTHER CHARACTERISTICS OF PERSONAL INSURANCE;       

                        Along with the fundamental trait that characterizes insurance people, the principle of non-compensation, these insurances present some differentiating elements from damage insurance, such as the following:

                          > Insurance refers to the human person as object-subject exposed to risk, either in relation to their own life or they're physical integrity or health.

                    > As a consequence of the foregoing, the insured must be a determined person or at least determinable, since it must identify the object exposed to risk.

                      > The insured amounts do not represent the value of the damage or economic damage to be covered by insurance nor can they be determined in an objective way, but are fixed according to the wishes of the policyholder, as well as their possibilities economic.

                             > Given the "object" on which the risk gravitates, the person when a policyholder is a person other than the insured's consent is required for the contract can be concluded.

                                > Another fundamental characteristic is the appearance of the figure of the beneficiary, coinciding or not with the insured, which constitutes a fourth personal element of the insurance contract together with the insurer, the policyholder, and the insured himself.

                               > In insurance that covers the risk of death (either in the branches of life or accidents), a beneficiary is necessarily a person other than the insured as the latter has died when the benefit must be satisfied by the insurance company agreement. For the benefits provided for the life of the insured, the beneficiary can also be a different person although in practice it is often the insured himself (retirement or disability insurance, for example).

                                 > The the future event covered by the contract, which in the insurance that covers risks on things and on assets have harmful nature, it is not always so in personal insurance. The nuptiality or nasality is obviously not harmful facts, nor is the survival of a person in insurance retirement, for example. In these cases, what does occur are economic needs that justify the possibility of assurance and risk rating of events cited, although they are not harmful events and that in general terms can be qualified as favorable?                            

                              > Some personal insurance, specifically life insurance, presents the characters in addition to being destined to have a long term or even to continue throughout the life of the insured. In damage insurance, the duration that generally has a contract is one year, with tacit renewal for annual periods and the possibility of termination by either party with the corresponding notice. Death insurance, in change, as well as retirement insurance, whole life, etc., are generally contracted for a supra-annual duration, during which the insurer does not have the power to terminate the contract.

                              > This generally, the long duration of the insurance we discussed, produces specific effects that are manifested on several levels and not only in relation to between the parties to the contract but also at the level of the economy in general.

                               >  In the field of life insurance, typical figures of this type of insurance such as mathematical provisions, the possibility of the existence of loans or advances of the same in favor of the insured, as well as the reduction, rescue, and transformation of contracts, etc.

                                > The beneficial effects of life insurance and other insurance personal information about the economy given long-term investments performed with mathematical provisions make the tax treatment of this type of insurance, in general countries is an important point to take into account in your expansion, as they normally have a fiscal consideration favorable.

                                > Private personal insurance, on the other hand, coexists in all countries in which there is a Social Security plan, with public insurance. This occurs in the life insurance of retirement, occupational accidents, illness, etc. The extent of public insurance determines in an important way the own expansion of private insurance and is an element that takes into account considerable incidence.

Other characteristics of life insurance in particular, such as are the type of risk it covers (homograde and variable), its technical nature, based on mortality statistics, etc.