Short term insurance covers risks on property and liability. They issue insurance contracts of indemnity from year to year. They keep large funds to meet larger volatility in their business and can finance on short-term basis only. Health insurance contracts are of either type, short as well as long. Both life as well as non- life insurers transact this type of business each selling products that suit their province.
Social insurance is a class apart.
The state shares a part of the premium with the insured person or where he is employed, with him and his employer. This insurance is of compulsory nature and is offered because most people are unable to afford price of insurance on their own. Depriving them totally or altogether from insurance, leads to privation and ultimately social costs. In developed economies the social insurance covers extends from birth through unemployment, sickness and lifelong pensions to right upto funeral expenses. It is provided at a low level.