2. DEFINITION
Insurance is a contract between the insurer and the insured
were by the insurer agrees to pay a certain sum of money to
the insured on the happening of a specified event for a
consideration called premium.
Insurance is a means of protection from financial loss.
It is form of risk primarily used to hedge against the risk of a
contingent, uncertain loss.
4. GENERAL INSURANCE
General insurance typically comprises any insurance that is not determined
to be life insurance.
General insurance or non-life insurance policies, including automobile and
homeowners policies provide payments depending on the loss from a
particular financial event.
It is called property and casualty insurance in the U.S. and Non-life
insurance in Continental Europe.
5. FIRE INSURANCE
Fire insurance is a form of property insurance which protects people from
the costs incurred by fire.
When a structure is covered by fire insurance, the insurance policy will pay
out in the event that the structure is damaged or destroyed by fire.
6. HEALTH INSURANCE
Health insurance, like other forms of insurance, is a form of collectivism by
means of which people collectively pool their risk, in the case the risk of
incurring medical expenses.
Individual health plan
Family floater plan
Senior citizens plan
Critical illness plan
Daily hospital cash plan.
7. MARINE INSURANCE
Marine insurance covers the loss or damage of ships, cargo, terminals, and
any transport or cargo by which property is transferred, acquired, or held
between the points of origin and final destination.
8. AUTO INSURANCE
Auto insurance (also known as vehicle insurance, car insurance, or motor
insurance) is insurance purchased for cars, trucks, and other vehicles.
Its primary use is to provide protection against losses incurred as a result
of traffic accidents and against liability that could be incurred in an
accident.
10. What is life insurance ?
Life insurance can be termed as an agreement between the policy owner
and the insurer, where the insurer for a consideration agrees to pay a sum
of money upon the occurrence of the insured individual’s or individual’s
death or other event, such as terminal illness, critical illness or maturity of
the policy.
Bombay mutual Assurance Society, the first Indian Life assurance society,
was formed in 1870.
11. TYPES OF LIFE INSURANCE
Term life insurance
I. Increasing /decreasing term policies
II. Convertible term assurance policy
III. Level term life insurance
IV. Renewable term life insurance
Endowment insurance
I. Joint life endowment plan
II. Money back endowment plan
III. Marriage endowment plan
Permanent life insurance
I. Ordinary whole life plan
II. Limited payment whole life plan
Unit linked plans
12. TERM LIFE INSURANCE
Sum assured is payable only in the event of death during the term.
In case of survival, the contract comes to an end at the end of term.
Term life insurance can be for period as long as 40 years and as short as 1
year.
No refund of premium.
Low premium as only death risk is covered.
13. INCREASING TERM INSURANCE
Life insurance cover under this plan goes on increasing periodically over
the term in a predetermined rate.
DECREASING TERM INSURANCE
The sum assured decrease with the term of the policy. Normally
term assurance plan is taken out for mortgaged protection, under which
outstanding loan amount decreases as time passes as also the sum
assured.
CONVERTIBLE TERM ASSURANCE POLICY
Under this plan a policy holder is entitled to exchange the term policy for
an endowment insurance or a whole life policy
LEVEL TERM LIFE INSURANCE
The sum assured throughout the term of the policy does not change.
RENEWABLE TERM LIFE INSURANCE
The insurance co. automatically allows you to renew your coverage after
the term of the policy is over (5 to 20 years).
14. ENDOWMENT INSURANCE
It is an investment oriented plan which not only pays in the event of death
but also in the event of survival at the end of the term.
Premium includes 2 elements- mortality element & investment element.
Min. age at entry – 12 yrs.
Max. age at entry – 65 yrs.
Max. age at maturity – 75 yrs.
15. JOINT LIFE ENDOWMENT PLAN
Under this plan, two lives can be insured under one contract.
The sum assured is payable at the end of the endowment term or death
either of the two.
MONEY BACK ENDOWMENT PLAN
In this, there is an additional advantage of receiving a certain amount of
money at periodic intervals during the policy term.
MARRIAGE ENDOWMENT PLAN
This plan has the specific condition that the sum assured is payable only
after the expiry of the term even if death of the life assured takes place
earlier
EDUCATIONAL ENDOWMENT PLAN
These plans are specially designed to meet educational expenses of
children at a future date.
16. PERMANENT LIFE INSURANCE
Which cover death for an indefinite period.
When the policy holder dies, the face value of the policy, known as a death
benefit, is paid to the person or persons named in the life insurance
policy(the beneficiary or beneficiaries).
It can be with or without profits.
17. ORDINARY WHOLE LIFE POLICY
This is a continuous premium payment plan. The insured pays premium
throughout his life. It provides dual facility of protection plus savings.
LIMITEDPAYMENT WHOLE LIFE PLAN
It provides the same benefit as above but premiums are paid for a limited
period. premiums are sufficiently higher to cover the risk.
18. UNIT LINKED PLANS
It has emerged as one of the fastest growing insurance products.
It is a combination of an investment fund (such as mutual fund) and an
insurance policy.
Better for long term investment option.
ULIPs generally provided higher returns as large portion of the funds are
invested in equities.
There is also option of switching over from one fund to another if it does
not seen to be profitable.s
