This document provides an overview of life insurance in India. It discusses what life insurance is, the history of insurance in India including the first insurance companies and key legislation. It outlines benefits of life insurance for India such as providing funds for infrastructure, enabling foreign exchange, and relieving burden on the government. The document also describes traditional and non-traditional life insurance products and applications of life insurance such as key man insurance and mortgage redemption insurance.

1. LIFE INSURANCE
17-08-2022

2. WHAT IS INSURANCE?
Life Insurance can be defined as a contract between an Insurance Policy Holder and
an Insurance Company, where the insurer promises to pay a sum of money in exchange for a
premium, upon the death of an insured person or after a set period.

3. HISTORY OF INSURANCE
The Oriental Life Insurance Co. Ltd.-First Insurance Company
Bombay Mutual Assurance Society Ltd.- First Indian Insurance Company
LIC of India 1956 - Nationalization of Life Insurance
Insurance Act 1938 – First legislation to regulate the conduct of Insurance
Insurance Regulatory and Development Authority (IRDA)-Statutory body for both Life and
Non Life Insurance

4. BENEFITS OF LIFE INSURANCE FOR INDIA
Insurance provides funds to the government for providing basic facilities and developing infrastructure.
It has enabled the country to get foreign exchange (49% FDI is permitted in the insurance sector in
India).
Insurance relieves the government of the burden of supporting a family, in case of the untimely demise
of the breadwinner.
 Insurance promotes trade and industry by providing risk cover.
 Insurance companies pay taxes out of profits earned. This is an important revenue source for the
government.
 Insurance companies are permitted to invest 5% of the funds in the capital market. LIC alone has
invested around Rs.28,000 crore in the Indian capital markets. Such investments develop the capital
market.

5. LIFE INSURANCE PRODUCT
Traditional Life Insurance –
Non- Traditional Life Insurance

6. Traditional Life Insurance –
Term Insurance Plan- Sum Assured. Paid only on Death (Only as
the Death benefit).
A variant of Life Insurance
 Decreasing Term Insurance
 Increasing Term Insurance
 Term Insurance with the return of premium
 Pure Endowment Plan
 Endowment Assurance Plan
 Money Back Plan
 Whole Life Plan
 Limitation –
 Cash Value Component
 Rate of return
 Surrender Value
 Yield

7. NON-TRADITIONAL LIFE INSURANCE
• This plan is a combination of Insurance and Investment.
• They are low-risk plans
• No partial withdrawal is allowed till the end of the lock period.

8. NON TRADITIONAL LIFE INSURANCE
PRODUCTS
• Universal Life Insurance – Flexible premiums and death benefits
• Variable Life Insurance - Kind of “Whole Life” policy where death benefit
and cash value fluctuates according to the investment performance of
the investment account in which premium is credited.
• Unit Linked Insurance Plan’s most popular and significant products,
These plans provide the means for directly and immediately cashing on
the benefits of a life insurer’s investment performance.

9. APPLICATION OF LIFE INSURANCE
• Married Woman Property Act
• Key Man Insurance
• Mortgage Redemption Insurance

10. DOCUMENTATION

12. THANK YOU