All the details related to Insurance.

2. 1. Introduction to Insurance.
2. Types of Insurance.
3. Insurance act.
4. Benefits of Insurance.
5. Insurance contract and Element of Insurance contract.
6. How the Insurance works.
7. Importance of Insurance.
8. Conclusion.

3. 1. The life and property of an individual are surrounded by the risk of death,
disability or destruction. These risks may result in financial losses.
Insurance is a prudent way to transfer such risks to an insurance company.
2. Insurance is a practice or arrangement by which the company or the
government agency provides a guarantee of compensation for specified
loss, damage, illness or death in return for a payment of a premium. In
other words, Its a thing providing protection against a possible eventuality.
It’s called a contingency because there’s an uncertainty regarding
happening of the event.
3. There various components of insurance are-:
Insurance policy premium.
Policy limit.
deductible.

4. These are the most common types Insurance India-:
1. Life Insurance.
2. Health Insurance.
3. Car Insurance.
4. Education Insurance.
5. Home Insurance.
6.General Insurance.

5. 1. Life insurance-:
As the name suggests, life insurance is insurance on your life. You buy life
insurance to make sure your dependents are financially secured in the event of
your untimely demise. Life insurance is particularly important if you are the sole
breadwinner for your family or if your family is heavily reliant on your income.
Under life insurance, the policyholder’s family is financially compensated in
case the policyholder expires during the term of the policy.
2. Health insurance-:
Health insurance is bought to cover medical costs for expensive treatments.
Different types of health insurance policies cover an array of diseases and
ailments. You can buy a generic health insurance policy as well as policies for
specific diseases. The premium paid towards a health insurance policy usually
covers treatment, hospitalization and medication costs.
3. Car insurance-:
In today’s world, a car insurance is an important policy for every car owner.
This insurance protects you against any untoward incident like accidents.
Some policies also compensate for damages to your car during natural
calamities like floods or earthquakes. It also covers third-party liability where

6. 4. Education Insurance-:
The child education insurance is akin to a life insurance policy which has been
specially designed as a saving tool. An education insurance can be a great way
to provide a lump sum amount of money when your child reaches the age for
higher education and gains entry into college (18 years and above). This fund
can then be used to pay for your child’s higher education expenses. Under this
insurance, the child is the life assured or the recipient of the funds, while the
parent/legal guardian is the owner of the policy. You can estimate the amount
of money that will go into funding your children’s higher education
using Education Planning Calculator.
5. Home insurance-:
We all dreaming of owning our own homes. Home insurance can help
with covering loss or damage caused to your home due to accidents like fire
and other natural calamities or perils. Home insurance covers other instances
like lightning, earthquakes etc.
6. General Insurance-:
It is a type of insurance in which anything is insured other than human life.
General insurance or non-life insurance policies including automobiles and
homeowners policies provide payments depending on the loss from a particular

7. 1. The Insurance Act, 1938 is a law originally passed in 1938 in British India to
regulate the insurance sector. It provides the broad legal framework within
which the industry operates.
2. The Insurance Act has 120 sections and 8 schedules. Under it, only an
Indian company, as defined and registered under Companies Act, 1956, is
allowed to operate in India. Its foreign entity-owned equity should not exceed
49% as of 2015. It must have a licence from Insurance Regulatory and
Development Authority of India.
3. In March 2021, The Insurance (Amendment) Bill, 2021 was passed by
the Parliament of India which increased the maximum permissible Foreign
Direct Investment in the insurance sector to 74%, from the previous limit of

8. Insurance policies benefit people as well as society as a whole in various
ways-:
1. Cover against uncertainties-:
It is one of the most prominent and crucial benefits of insurance and crucial
benefits of insurance.
The insured individual or organisations indemnified under the insurance
policies against losses.
Buying the right type of insurance policy is needed, a way to get protection
against losses arising from
different uncertainties
2. Cash flow management-:
The uncertainty of paying for the losses incurred out of pocket has a significant
impact on cash flow management. However, with an insurance policy by your
side, you can tackle this uncertainty with ease. The chosen insurance provider
pays in the event of happening of an insured event whenever they occur.

9. 1. Insurance contract-: An insurance contract is a document representing
the agreement between an insurance company and the insured. Central to
any insurance contract is the insuring agreement, which specifies the risks
that are covered, the limits of the policy, and the term of the policy.
2. There are certain types of insurance most people need to have. For
example, if you own a home then homeowner's insurance may be
standard. Auto insurance covers your vehicle while life insurance protects
you and your loved ones in a worst-case scenario.
 NOTE-: It's important to read through an insurance contract carefully before
signing so you understand what you're agreeing to. You should also review the
contract to check for any errors that may affect your coverage or costs.

10. Elements of insurance contract-:
Elements of Insurance Contract can be classified into two sections-:
The elements of general contract and The elements of special contract
relating to insurance: the special contract of insurance involves principles:
insurable interest, utmost good faith, indemnity, subrogation, warranties.
Proximate cause, assignment, and nomination, the return of premium.
This Act says that all agreements are the contract if they are made by the free
consent of the parties, competent to contract, for a lawful consideration and
with a lawful object and which are not at this moment declared to be void.
The insurance contract involves—
A. The elements of the general contract.
B. The element of special contract relating to insurance.

11.  So, in total, there are eight elements of the insurance contract which are
given below:
 General Contract.
 Offer and Acceptance.
 Legal Consideration.
 Competent to make the contract.
 Free Consent.
 Legal Object.
 Insurable Interest.

12. The insurer and the insured get a legal contract for the insurance, which is
called the insurance policy.
The insurance policy has details about the conditions and circumstances
under which the insurance company will pay out the insurance amount to either
the insured person or the nominees. Insurance is a way of protecting yourself
and your family from a financial loss.
Generally, the premium for a big insurance cover is much lesser in terms of
money paid. The insurance company takes this risk of providing a high cover
for a small premium because very few insured people actually end up claiming
the insurance. This is why you get insurance for a big amount at a low price.
Any individual or company can seek insurance from an insurance company,
but the decision to provide insurance is at the discretion of the insurance
company. The insurance company will evaluate the claim application to make a

13.  The world we live in is full of uncertainties and risks. Individuals, families,
businesses, properties and assets are exposed to different types and levels of
risks. These include risk of losses of life, health, assets, property, etc. While it
is not always possible to prevent unwanted events from occurring, financial
world has developed products that protect individuals and businesses against
such losses by compensating them with financial resources. Insurance is a
financial product that reduces or eliminates the cost of loss or effect of loss
caused by different types of risks.
 Apart from protecting individuals and businesses from many kinds of
potential risks, the Insurance sector contributes significantly to the general
economic growth of the nation by providing stability to the functioning of
businesses and generating long-term financial resources for the industrial
projects. Among other things, Insurance sector also encourages the virtue of
savings among individuals and generates employments for millions, especially
in a country like India, where savings and employment are important.
 Let’s understand how and why Insurance as a sector is key to development
of any economy-:
 Provides Safety and Security to Individuals and Businesses.
 Generates Long-term Financial Resources.

14. Insurance is a tool by which fatalities of a small number are compensated out
of funds collected from plenteous. Insurance is a safeguard against uncertain
events that may occur in the future. Over the last 5 to 6 years the national
insurance companies have tripled investor’s money than the other competent;
This progress leads to increase the companies image and makes a way to lead
the total insurance market.
Thus the study also comprise company’s image is the highly important criteria
that consumers consider before taking up a life insurance. This is mainly
because people expect safety and secure for their money which they invest
followed by the factor premium which we pay to the insurer and then bonus
and interest the company, services, et cetera.