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InsuranceInsurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Insurance in India Insurance is a federal subject in India and has a history dating back to 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the country's GDP while general insurance premiums to 0.65% of India's GDP.[1]. The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance company wanting to have a lion's share. Currently, the largest life insurance company in India is still owned by the government.
Insurance TypesLife Insurance:Children's Insurance Policy: Children's insurance includes policies through which parents or legal guardians can provide for life insurance for their child from birth. The risk cover commences from the child attaining the age of 12 / 17 / 18 / 21 (known as the Date of Risk), and will vest itself on the child upon his or her attaining majority on completion of age 21, if the case demands so. Until the child attains majority, the parents are the owners of the policy and have to pay the premium periodically. It is important that these policies are considered only after the insurance portfolios of the parents have been completed. Endowment Policy: An endowment policy is a life assurance contract designed to pay a lump sum after a specified term or on earlier death. Policies are typically traditional with-profits or unit-linked. Endowments can be cashed in early - known as surrendered - and will then be paid the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it. During adverse investment conditions, the encashment value or surrender value may be reduced by a 'Market Value Adjuster' to allow for the need to cash in units at a time when investment conditions are not ideal. This means that the investor would receive the surrender value less the market value adjust. Group Insurance Policy: Group insurance is a health care coverage plan in which individual employees or members are included under one 'master policy' owned by their employers. Because the group insurance plan has so many contributors, the policy often provides coverage for more services at a much lower cost per participant. Joint Life Policy: This policy is issued on the lives of the husband and wife provided the female's life belongs to Category I or is actively engaged in her spouse's business. Moneyback Policy: Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money back policies provide for periodic payments of partial survival benefits during the term of the policy, of course so long as the policy holder is alive. Whole Life Policy: A whole life policy runs as long as the policyholder is alive. As risk is covered for the entire life of the policyholder, therefore, such policies are known as whole life policies. A simple whole life policy requires the insurer to pay regular premiums throughout the life. In a whole life policy, the insured amount and the bonus is payable only to the nominee of the beneficiary upon the death of the policyholder. There is no survival benefit as the policyholder is not entitled to any money during his / her own lifetime. Policy for Women: LIC has specially designed a policy for women encouraging them to save for safety & security. This Policy provides for fund in times of need like education, marriage, sickness etc.
Non Life Insurance Policy Auto Insurance Policies: This insurance policy is essential for all motor vehicle owners since it protects them from legal liabilities that might arise during their vehicle operation. This insurance policy also known as the Act Only policy covers the act liability of the insured vehicle that forms a compulsory requirement of the Motor Insurance Act. Commercial/Business Insurance Policies: The success of a business, whether it's a tiny enterprise run out of a basement or a large corporation, is largely dependent on hard work and ingenuity. However, no matter how industrious you are, one disaster can wipe out all your profits and even destroy your business. The key to making sure that all the effort and money you have invested in a business doesn't disappear when a disaster strikes is to protect it with the appropriate insurance. Commercial property insurance policy offers protection to commercial establishments against a myriad of risks and perils. As companies grow larger and expand their business, they need to safeguard their business against potential contingencies. Insurance companies provide commercial insurance to a number of businesses ranging from large MNCs to small shopkeepers. Travel Insurance: This policy is apt for all Indian nationals aged 18 and above if they plan to take a trip abroad or within India for business or pleasure. This policy provides indemnity against the risk of physical loss to the insured individual owing to any accident (including fatal injuries) during his specified period of travel. It also insures him against the risk of losing his baggage and passport during his specified period of travel. National Insurance Corporation of India
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