This article throws light upon the top three types of insurance. The types are: 1. Group Life Insurance 2. Livestock Insurance 3. Cooperative Insurance.
In the Underdeveloped Countries the coverage of life insurance against sickness, accidents and deaths is very low because of the high cost of coverage of the life insurance. Therefore, any means designed to lower the cost is appreciable. These types of insurance can make the important contribution to social and economic security of UDC’s.
Group life insurance is well adapted to these needs. It is a standard blanket policy issued to a group of individuals, each person in the group receiving a simple certificate of insurance. The net result is a considerable saving in cost and lower premium rates.
Livestock insurance is very popular in Canada, Israel, Republic of Korea and other countries. It has high utility in developing countries where animals are used for various purposes like drought, ploughing, transportation, milk production, meat and other sources of income for example, Nigeria, which supplies the best quality of beef.
Livestock insurance normally covers both health and depreciation through diseases or accidents. Insurance of animals are done between six months or a year to fifteen years, indemnity is given up to 80% not 100%. Claims are related either to market value of the animal at the time of loss or the value assessed periodically.
The major difficulty of the livestock insurance particularly in UDC’s is poor animal husbandry, inadequate veterinary services, therefore, there is advantage in insuring through cooperative preferably in association with cooperative dairy farmers, feed cooperatives or cooperative livestock breeding society, which would imply higher standard of health protection for livestock as well as reduction in risks because of close supervision by cooperatives.
Cooperative societies may systematize the provision of veterinary services by registering all insured animals, charging members an annual fee for veterinary services and drugs in return for periodic veterinary inspections plus medical attention when required.
In the process of social and economic development cooperatives of various kinds have been assigned an important role in several developing countries. A United Nations resolution urges member States to actively promote development of cooperative movement.
Cooperative insurance is not only consistent with the objectives of developing domestic insurance markets but also has a special role to play in overall development process.
The cooperative insurance and private insurance differ the same way as cooperative societies differ from private firms. An insurance cooperative can be formed as a joint stock company, mutual or any other form allowed for by laws of the country concerned. The critical question is that of control and it should be controlled by those who use their services.
Policies are decided by committee of management. Another way in which members influence is exercised is through the setting up of various types of consultative councils and committees. The members interests are multifarious such as fast and efficient service, product development and creative capacity.
A cooperative insurance company organized as mutual is by definition, like any other mutual, operated on a non-profit basis. A joint stock cooperative insurance is also organized on non-profit basis. All insurance companies have an obligation to their policy holders to invest their funds in such a way that maximum return with minimum risk will be obtained over a long period.
But cooperative insurance companies have additional objectives that is, to invest in cooperative activities as far as possible having a socially desirable investment while strictly observing normal requirements of solvency, liquidity, and yield as well as spread of risk.
Cooperative insurance has wider social and economic goals for the sake of access to national network of potential policy holders, as well as valuable sponsoring and support. Cooperative insurance companies are operating in six countries of Africa, five in Asia and nine in Latin America.