This document discusses the key elements of life insurance. It defines life insurance as a contract between an insurer and policyholder where the insurer pays a sum of money to beneficiaries when the insured person dies in exchange for premiums paid. It outlines the main principles of life insurance contracts including offer and acceptance, consent of parties, legality of purpose, and consideration. It also describes different types of life insurance plans such as individual plans, group plans, and pension plans. It defines the classification of insurable risks and annuities.
3. LIFE INSURANCE
Lifeinsuranceis a contract between a life insurance
company anda policy owner.
A life insurancepolicy guaranteesthe insurerpays a sum
of money to one ormore namedbeneficiarieswhen the
insuredperson diesin exchangefor premiums paidby the
policyholder duringtheir lifetime.
If the paymentis to be madeon the deathof the insured,
the insuredmay nominatea person to receive the
amount. If the amountis to be paidon the expiry of a
certainnumber of years,then the insuredmay himself
receiveit if he is aliveon the expiry date.Otherwise, his
nominee will receiveit.
4. PRINCIPLES OF LIFE INSURANCE
OFFER AND ACCEPTANCE
CAPACITY OF PARTIES
FREE CONSENT
LEGALITY OF OBJECT
CONSIDERATION
UTMOSTGOODFAITH
INSURABLE INTEREST
5. DIFFERENT PLANS OF LIFE INSURANCE
Individual plans
Group Insurance plans
Pension plans
6. INDIVIDUAL PLANS:
Whole Life schemes
Endowment schemes
Termassuranceplans
Plans for needsof children
Periodicmoney backplan
Plans for the benefit of handicapped
Plan to cover housing loan
Joint life plan
Plan for high worth individuals
Investment plan
7. Employer- employee group;
Labor union group;
Creditor - Debtor;
Voluntary group like that of teachers, doctors or
lawyers.
Group Insurance plans
Salary of the employee
Job classification
Length of the service.
8. CLASSIFICATION OF RISK ELEMENTS
UninsurableRisk
Insurable Risk
Uninsurable risk: It refers to that risk where the
mortality rate is so high as to make the premium for
the assured completely prohibitive.
Insurable Risk: An insurable risk is one which can
b insured on standard terms and conditions or
otherwise.
9. ANNUTIES:
According to D.S. Hansell,”Annuity is a form of pension,
whereby in return for a certain sum of money (paid in a
lump sum or by installment)the insurer agrees to pay
the annuitant an annual amount (an annuity) for a
specified period or for the remainder of the annuitant’s
life”.