Insurance compensates for the economic loss and financial loss. If economic loss occurs, it will be compensated along with the premium . An Asset has economic value. Human life value was coined by Hubennnnezar. It is yearly income multiplied by ten times.
There are three types of Insurance. They are
Insurance began to exist since the year 1800. First Insurance is marine insurance in Lloyds place. First Insurance Company in India is Oriental Life Insurance. First Non-life Insurance company s Triton .National Insurance was founded in 1870 it is the old traditional company.
Life Insurance act was passed in the year 1912
Regulation Act was passed in the year 1938
National Life Insurance was found in the year 1956
In the year 1972-General Insurance Business Nationalisation act was passed
In the year 1999, IRDA, full form “ Insurance Regulatory development Authority of India”.
From the year 2001, 24 insurance company was found as of today in India.
It is an economic loss whichever causes it. It is also called as Peril/Hazard. While peril is death due to cancer, Hazard is smoking which caused cancer resulting in death.
There are three types of risk. They are
Living too long
Insurance is an agreement where offer and acceptance must be there. Consideration is the amount payable to the insured at the end of the maturity period. The capacity of the insured must be above the age of 18 with good mental health. Utmost good faith is important for taking Insurance.
Owner of property must insure for economic loss. For example, an employer can take insurance for his employees as absence of employee due to sickness or death is an economic loss to him.
Principle of Indemnity
Indemnity contract exist in Non-life Insurance while Value contract exist in Life Insurance.
Micro Insurance-Low Income group. The maximum amount (sum assured) is Rs.50000 and the minimum amount (sum assured) is Rs.5000. It is present in both Life and Non-life Insurance.
Know your customer norms
This requires the following proofs for taking an insurance policy.
- Address proof
- ID proof
- Age proof
- a) Standard age proof-Baptism
- b) Non-standard age proof
When insurance amount will not be given. If the insured commits suicide within a year, no sum assured will be given to his family.
Grace period in Insurance is monthly, quarterly, half yearly and yearly. In the case of monthly and quarterly, grace period is 15 days. In the case of half-yearly and yearly, the grace period is 30 days.
After lapsing, policyholder can revive the policy with due fine and the amount pending within two years.
Ombudsman-He is not
by Court and he is not a judicial authority. There are 12 offices in India. If the policy amount is up to 20 lakhs, Ombudsman will take the case in case of grievances. Within 3 months, Judgment must be made. If the Judgment is not satisfied, Insured can go to Consumer Redressal Forum or COPA.
District forum takes cases up to 20 lakhs.
State court forum cases from 20 lakhs-1 crore
National forum takes cases more than 1 crore.
If again the insured is not satisfied he/she can go to IRDA/Court.
Investment in Insurance will not make you rich but see that your family and your valuable assets are well protected to create a secured life for you and your family.