This document discusses the importance of life insurance. It provides 7 key reasons for its importance: 1) It provides safety and security for families by providing financial support in the event of death, 2) It generates financial resources by collecting premiums that are invested, 3) It encourages savings through regular premium payments, 4) It spreads risk from the insured to the insurer across a large number of people, 5) It provides medical support through medical insurance policies, 6) It promotes economic growth by mobilizing savings and enabling investments, 7) It serves as an important source of capital formation by collecting large funds. In conclusion, life insurance is emphasized as an important protection instrument for families rather than an investment product.

1. Importance
Of
Life Insurance
Presented By:
Pooja Motiani

2. INSURANCE
INSURANCE is a means of protection from
financial loss.
It is a form of risk management primarily used
to hedge against the risk of a contingent,
uncertain loss.
A thing providing protection against a possible
eventuality.

3. NATURE OF INSURANCE
Sharing of Risks
C0-operative Device
Valuation of Risk
Payment made on contingency
Amount of Payment
Insurance is not gambling
Insurance is not charity

4. Insurance
Life
Term
Cash Back ULIP Endowment
Permanent
General
Fire
Travel Health Motor Housing
Others
TYPE OF INSURANCE

5. LIFE INSURANCE
LIFE INSURANCE is a protection against financial
loss that would result from the premature death
of an insured.
The named beneficiary receives the proceeds
and is thereby safeguarded from the financial
impact of the death of the insured.
The death benefit is paid by a life insurer in
consideration for premium payments made by
the insured.

6. LIFE INSURANCE TYPES
1. Term Life Insurance:
Term insurance is a life insurance product
offered by an insurance company which offers
financial coverage to the policy holder for a
specific time period.
2. Permanent Life Policy:
The policyholder pays regular premiums until
his death, upon which the corpus is paid out to
the family.

7. LIFE INSURANCE TYPES
3. Endowment Plans :
Endowment plans pay out the sum assured
under both scenarios - death and survival.
4. Unit Linked Insurance Plans :
ULIP is a life insurance product, which provides
risk cover for the policy holder along with
investment options to invest in any number of
qualified investments.

8. LIFE INSURANCE TYPES
5. Cash Back Policy :
Money back plan is a life insurance product as
well as an investment plan which provides life
insurance cover against death of the policy
holder along with periodic returns as a
percentage of sum assured.

9. Importance
Of
Life
Insurance
Provide
safety
and
security
Generate
s
financial
resources
Life
insurance
encourag
es
savings
Promotes
economic
growth
Medical
support
Spreadin
g of risk
Source of
collecting
funds

10. IMPORTANCE OF LIFE INSURANCE
1. Provide safety and security:
Insurance provide financial support and reduce
uncertainties in business and human life. It provides
safety and security against particular event. There
is always a fear of sudden loss. Insurance provides
a cover against any sudden loss. For example, in
case of life insurance financial assistance is
provided to the family of the insured on his death. In
case of other insurance security is provided against
the loss due to fire, marine, accidents etc.

11. IMPORTANCE OF LIFE INSURANCE
2. Generates financial resources:
Insurance generate funds by collecting premium.
These funds are invested in government securities
and stock. These funds are gainfully employed in
industrial development of a country for generating
more funds and utilised for the economic
development of the country. Employment
opportunities are increased by big investments
leading to capital formation.

12. IMPORTANCE OF LIFE INSURANCE
3. Life insurance encourages savings:
Insurance does not only protect against risks and
uncertainties, but also provides an investment channel
too. Life insurance enables systematic savings due to
payment of regular premium.
4. Spreading of risk:
Insurance facilitates spreading of risk from the insured to
the insurer. The basic principle of insurance is to spread
risk among a large number of people.

13. IMPORTANCE OF LIFE INSURANCE
5. Medical support:
A medical insurance considered essential in
managing risk in health. Anyone can be a victim of
critical illness unexpectedly. And rising medical
expense is of great concern. Medical Insurance is
one of the insurance policies that cater for different
type of health risks. The insured gets a medical
support in case of medical insurance policy.

14. IMPORTANCE OF LIFE INSURANCE
6. Promotes economic growth:
Insurance generates significant impact on the
economy by mobilizing domestic savings.
Insurance turn accumulated capital into productive
investments. Insurance enables to mitigate loss,
financial stability and promotes trade and
commerce activities those results into economic
growth and development. Thus, insurance plays a
crucial role in sustainable growth of an economy.

15. IMPORTANCE OF LIFE INSURANCE
7. Source of collecting funds:
Large funds are collected by the way of premium.
These funds are utilised in the industrial
development of a country, which accelerates the
economic growth. Employment opportunities are
increased by such big investments. Thus, insurance
has become an important source of capital
formation.

16. CONCLUSION
Insurance is not an investment product , its a Protection
instrument for your Family or any one your want to
cover. There are other products for your investments.
Life insurance is one of the most selfless things
you’ll ever buy. It’s about making sure that the people
you love the most are well looked after should the worst
happen.
Taking out life insurance could ensure that your
family keep the home they’ve grown up in, or that your
children go to university, even if you’re not around to
help with the expense.