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Categories of Life Insurance

There are numerous distinct markets for insurance. Within the various markets are policies designed to fit the different individual or organization attitudes toward their needs. Life insurers issue three basic kinds of coverage:

  1. Ordinary Insurance
  2. Industrial Insurance
  3. Group Insurance

Different companies will specialize in different types of insurance or economic markets. The different companies will then merchandise products designed to appeal to their targeted market.The marketing practices and policies will be designed differently for the various economic levels of the social structure, as well as the type of merchandising which is most effective within those various market sectors.

Ordinary Insurance

Ordinary Insurance includes all types of temporary or term insurance and also numerous variations of permanent insurance protection plans. The permanent insurance protection plans build cash value. The premiums of any plan may be paid monthly, quarterly, semiannually or annually.  Most ordinary insurance in Florida is marketed and sold by insurance agents.

 

Industrial Insurance

Industrial Insurance is marketed today in rather small face amounts because of the nature of the target market. Many "Home Service" companies operate in this market. These operations also market many family type "combination policies."

Group Insurance

The third major type of insurance merchandising is Group Insurance. It is often written on:

  1. Employer-employee groups
  2. Associations, unions
  3. Credit life through lenders

Group provides insurance for a number of individuals under one contract. The contract owner may be a business for its employees or an association for its members. The master contract is between the insurance company and the policy owner for the benefit of either the employees or members. Group Insurance is noted for its underwriting based on a group rather than an individual so an insurer cannot pick and choose among members of the group which it wishes to insure. They either take them all or they take none.

The following question is a review of the content on this page. Answer it and then click below to check your response.

The three major categories of Life Insurance are ____, ____, and ____.