WHAT IS INSURANCE
Insurance is a sharing device. The losses to assets resulting natural calamities (Like fire, flood, earthquakes, accidents etc.) are met out of common pool contributed by large number of persons who are exposed to similar risks.
Insurance is the method of spreading and transfer of risks
The fortunate many who are exposed same or similar risks share loss for
The unfortunate few.
Assets (created in expectation of future need /benefits) have a value.
Loss of assets deprives the owner of the expected benefits.
Insurance in this context is mechanism that to reduce the adverse
Consequences due to loss of assets.
Classification of insurance:
Insurance business can be divided into basic categories.
1. life insurance
2. non-life insurance
Life insurance is concerned with making provision for a specific event happing to the individual non life insurance is commonly concerned with the provision for a specific. Etc.
Event, which affect a property such as fire, flood, theft
What is life insurance?
Life insurance is an agreement between the person insured and the insurer. Under the term of a life insurance. Contract the insurer promises to pay a certain sum on the happing of the event insured against to a beneficiary in exchange for premium payments.
Usually, the insurance contract provides for the payment of and amount on the date of maturity or at specified dates at periodic internals, or in the event of unfortunate death, if it occurs earlier. Life insurance is universally acknowledged as a tool to eliminate risk, replace uncertainty with certainty. And ensure timely aid for the civilized world’s partial solution to the financial problems caused by death.
Why life insurance is required:
Life insurance cannot be and should not be compared with any other form of investment. It provides a life long benefit, with returns when it is most required at right time.
Replacement of income
One prime reason for buying life insurance is to replace the income lost in the event of untimely death of the life insured. When this regular income stops, the proceeds from a life insurance policy can be used to support the family members.
Maintenance of lifestyle:
In case of the death life insured, family members are often hard-pressed trying to arrange for funds those can maintain of living that they have grown. Accustomed to life insurance offers protection against such an unfortunate eventuality.
Expenses due to pre-mature death:
Life insurance can play a crucial role to pay off any debt left behind by the person Insured. For example car loans, medical bill, mortgages, credit card payment, etc. are often left in case of sudden death. These obligations can be met with life insurance without any depletion in family assets.
Planning for important event life children’s marriage etc.
With the cost of living going up day by day prudent people would go for a life insurance as the most cost effective means to ensure that the important mile stone in their children’s lives are not hampered by the uncertainties of life.
Investment:
Life insurance can also be an investment instrument apart from ten benefits that are also allowable. By the government of India for investing to life insurance some life insurance policies offer returns on investment along with the cover for life. Life can help you with long-term financial goals.
Charity:
Life insurance is Great Avenue to help. A charitable cause, or people with philanthropic desire but short of means, life insurance provides the option to contribute much more than is possible by the life insured.
Benefits of life Insurance:
superior to any other saving plan:-
Life insurance policies offer protection against the risk of death which is nit Available in any other contemporary saving plan. In the event of death of a Policy holder’s the insurance makes available the full sum assured to the Policies holders near and dear ones. In comparison any other saving plan would amount to the total saving accustomed till date. If the death occurs prematurely, such saving can be much lesser than the sum assured.
Encourage thrift: - A saving deposits can easily be withdrawn. The payment of life insurance premiums however is considered sacrosanct payment of interest on mortgage.thus; a life insurance policy in fact brings about compulsory savings. and is viewed with the same seriousness as the payment of interest on mortgage. Thus, a life insurance policy in fact brings about compulsory savings.
Easy settlement and protection against creditors:- a life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditors of the assured by effecting a valid assignment.
Administering the legacy for beneficiaries: - speculative or unwise expenses can quickly cause the squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts.
Ready marketability and suitability for quick borrowing: - a life insurance policy can after a certain time period (generally three years) most cost effective means to ensure that the important milestones in their children’s lives are not hampered by the uncertainties of life.
Investment: - life insurance also is an investment. Apart from the tax benefits that are also allowable by the government of India for investing in life insurance, some life insurance policies offer returns on investment along with the cover for life. This can help you with long-term financial goals.
Critical illness benefit: - many policies can also provide for cover against critical illness.
Hospital cash benefit: - many policies can also provide for covering the hospitalization expenses, along with cover for life.
Tax benefit:- under the Indian income tax act, tax relief under section 88 is available for premium paid and section 10,10D benefit are available for death/ maturity/surrender proceeds from a life insurance policy.
1st Insurance Company started in 1818.
It was “oriental insurance company” a UK based company.
By 1868 there was 256 insurance companies had business in Indian market.
2nd Indian Insurance Company: “Oriental Insurance” by Firozshah Mehta.
1956,”Life Insurance Corporation of India” started operations from September 1st.
1999, IRDA Act was passed by which Insurance sector was opened for Private Companies. According to this investment by companies is Rs. 100 crores and the total of investment is 75% (Indian) + 26 %( foreign) max.
Insurance is a sharing device. The losses to assets resulting natural calamities (Like fire, flood, earthquakes, accidents etc.) are met out of common pool contributed by large number of persons who are exposed to similar risks.
Insurance is the method of spreading and transfer of risks
The fortunate many who are exposed same or similar risks share loss for
The unfortunate few.
Assets (created in expectation of future need /benefits) have a value.
Loss of assets deprives the owner of the expected benefits.
Insurance in this context is mechanism that to reduce the adverse
Consequences due to loss of assets.
Classification of insurance:
Insurance business can be divided into basic categories.
1. life insurance
2. non-life insurance
Life insurance is concerned with making provision for a specific event happing to the individual non life insurance is commonly concerned with the provision for a specific. Etc.
Event, which affect a property such as fire, flood, theft
What is life insurance?
Life insurance is an agreement between the person insured and the insurer. Under the term of a life insurance. Contract the insurer promises to pay a certain sum on the happing of the event insured against to a beneficiary in exchange for premium payments.
Usually, the insurance contract provides for the payment of and amount on the date of maturity or at specified dates at periodic internals, or in the event of unfortunate death, if it occurs earlier. Life insurance is universally acknowledged as a tool to eliminate risk, replace uncertainty with certainty. And ensure timely aid for the civilized world’s partial solution to the financial problems caused by death.
Why life insurance is required:
Life insurance cannot be and should not be compared with any other form of investment. It provides a life long benefit, with returns when it is most required at right time.
Replacement of income
One prime reason for buying life insurance is to replace the income lost in the event of untimely death of the life insured. When this regular income stops, the proceeds from a life insurance policy can be used to support the family members.
Maintenance of lifestyle:
In case of the death life insured, family members are often hard-pressed trying to arrange for funds those can maintain of living that they have grown. Accustomed to life insurance offers protection against such an unfortunate eventuality.
Expenses due to pre-mature death:
Life insurance can play a crucial role to pay off any debt left behind by the person Insured. For example car loans, medical bill, mortgages, credit card payment, etc. are often left in case of sudden death. These obligations can be met with life insurance without any depletion in family assets.
Planning for important event life children’s marriage etc.
With the cost of living going up day by day prudent people would go for a life insurance as the most cost effective means to ensure that the important mile stone in their children’s lives are not hampered by the uncertainties of life.
Investment:
Life insurance can also be an investment instrument apart from ten benefits that are also allowable. By the government of India for investing to life insurance some life insurance policies offer returns on investment along with the cover for life. Life can help you with long-term financial goals.
Charity:
Life insurance is Great Avenue to help. A charitable cause, or people with philanthropic desire but short of means, life insurance provides the option to contribute much more than is possible by the life insured.
Benefits of life Insurance:
superior to any other saving plan:-
Life insurance policies offer protection against the risk of death which is nit Available in any other contemporary saving plan. In the event of death of a Policy holder’s the insurance makes available the full sum assured to the Policies holders near and dear ones. In comparison any other saving plan would amount to the total saving accustomed till date. If the death occurs prematurely, such saving can be much lesser than the sum assured.
Encourage thrift: - A saving deposits can easily be withdrawn. The payment of life insurance premiums however is considered sacrosanct payment of interest on mortgage.thus; a life insurance policy in fact brings about compulsory savings. and is viewed with the same seriousness as the payment of interest on mortgage. Thus, a life insurance policy in fact brings about compulsory savings.
Easy settlement and protection against creditors:- a life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditors of the assured by effecting a valid assignment.
Administering the legacy for beneficiaries: - speculative or unwise expenses can quickly cause the squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts.
Ready marketability and suitability for quick borrowing: - a life insurance policy can after a certain time period (generally three years) most cost effective means to ensure that the important milestones in their children’s lives are not hampered by the uncertainties of life.
Investment: - life insurance also is an investment. Apart from the tax benefits that are also allowable by the government of India for investing in life insurance, some life insurance policies offer returns on investment along with the cover for life. This can help you with long-term financial goals.
Critical illness benefit: - many policies can also provide for cover against critical illness.
Hospital cash benefit: - many policies can also provide for covering the hospitalization expenses, along with cover for life.
Tax benefit:- under the Indian income tax act, tax relief under section 88 is available for premium paid and section 10,10D benefit are available for death/ maturity/surrender proceeds from a life insurance policy.
1st Insurance Company started in 1818.
It was “oriental insurance company” a UK based company.
By 1868 there was 256 insurance companies had business in Indian market.
2nd Indian Insurance Company: “Oriental Insurance” by Firozshah Mehta.
1956,”Life Insurance Corporation of India” started operations from September 1st.
1999, IRDA Act was passed by which Insurance sector was opened for Private Companies. According to this investment by companies is Rs. 100 crores and the total of investment is 75% (Indian) + 26 %( foreign) max.
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