Managing my financial journey
Managing my financial journey

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Managing my financial journey

The purposes of long-term and general insurance

Insurance grew out of the need to provide some financial protection for individuals and businesses if a certain event happened. In return for this protection, the insured would pay to the insurance firm a premium to provide that protection.

Early life assurance policies were commonly taken out by a husband in order to protect his wife and children, should he die at an early age. Life assurance is an example of long-term insurance because, once started, the insurance continues over the long term – provided that the insured continues to pay their premium. It also usually means that, once the policy has begun, the level of premium stays the same. Long-term insurance is most commonly associated with insuring either someone’s life or their health.

In contrast, general insurance provides cover typically only for a year, at which point the firm has the right either to refuse continuing the insurance of the individual or firm, or to change the premium level. This business is usually associated with the need to provide financial protection in the event of destruction or damage to property (e.g. a car, house or building) and is usually known by the collective term of general insurance.

Now that you’ve examined the purposes of long-term and general insurance, it’s time to look at how some specific types of insurance have emerged since the seventeenth century.

OUFL_27

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to university level study, find out more about the types of qualifications we offer, including our entry level Access courses and Certificates.

Not ready for University study then browse over 900 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus