When an insurance company insures itself it is called as reinsurance, where by it shares the risk of loss with another company. Insurance companies need reinsurance, when they face the danger of having to pay a multitude of claims at the same time and hence have no option but to face bankruptcy, where as if they have reinsured they are protected to a certain extent.

There are two kinds of reinsurances, treaty reinsurance and facultative reinsurance.
Treaty Reinsurance: This kind of reinsurance requires that the reinsurer will assume part or all of a ceding company’s responsibility for certain sections or classes of business in accordance with the terms of the policy. It is an obligatory contract as the ceding company has to cede the business and the reinsurer is obliged to assume the business as per the treaty. It is the preferred type of reinsurance when groups of homogenous risks are considered.

Facultative Reinsurance: This kind of reinsurance is used while considering a particular underlying risk of an individual contract. It is the reinsurance of all or part of a single policy after the terms and conditions have been negotiated. It reduces the ceding company’s exposure to risk from an individual policy. It is non- obligatory.

In another way, reinsurance is classified as proportional and non-proportional reinsurances.
Proportional Reinsurances: The two companies share the premium as well as risk. The reinsurer usually pays a ceding commission.

Pro-Rata Reinsurance: It is a classification based on the way the two companies share the risk. The cedent and the reinsurer share a pre decided percentage of the premium and losses. It is used widely as it provides surplus protection. There are two types of pro-rata reinsurance, quota share and surplus share.

Quota Share Pro-Rata Reinsurance: The primary insurer cedes a fixed percentage of premiums and loses for every risk accepted.

Surplus Share Pro-Rata Reinsurance: It is different in that not every risk is ceded but only those that exceed certain predetermined amounts.

Non-Proportional Reinsurance: As the name suggests it is not proportional and the reinsurer only responds if the loss suffered by the insurer exceeds a certain amount.

Excess of Loss: It covers a single risk or a certain type of business. Catastrophe reinsurance is a type of excess of loss reinsurance. It provides the captive with a great deal of flexibility.
Stop Loss Reinsurance: It covers the whole account and is also known as excessive loss ratio reinsurance.

These are the various types of reinsurances. There are firms that offer their services as well as their products to help new business start up flourish and succeed.

First and foremost, you must be aware of the basic types of life insurance deals that you will be offered by insurance companies. There are chiefly two types of life insurance; term insurance which offers temporary coverage and whole insurance which offers permanent benefits for you and your family both after death and during your lifetime. In the case of term life insurance it is always advisable not to take up deals for a very long period of time because as you age, the benefits your loved ones will draw from the insurance will become fewer.

Furthermore, you will hesitate while withdrawing any cash from it during your lifetime because that will mean further minimizing the funds your loved ones will get after you pass. For those looking for coverage of personal and business expenses for a term of ten to twenty years for loved ones after they pass, term insurance from a good insurance company is not a bad idea.

The second basic type of life insurance plan offered by most companies is the variable life and universal life or whole life plan. This is the more permanent type of life insurance plan and includes policies that offer benefits to your and your loved ones in a broader spectrum of circumstances. If you wish to have your death duties finances covered and want your loved ones to have a reserve of tax free cash in case of premature passing, whole life insurance is the best life insurance plan for you.

Looking for a life insurance plan for yourself is like shopping for any other important item in the market. The ideal way of getting the best type is doing your research, conducting a survey and finally comparing and analyzing your findings. Fortunately, for important decisions such as which insurance plan to buy, there are many companies and websites that generate quotes to tell you which plan offers the best policies suited to your specific requirements. Quote generating websites online are a great idea, because these are quick, reliable and absolutely free of cost which means that with little investment of time and energy you can have numerous quotes in hand to compare and decide.