Introduction to Insurance
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What Is Insurance?
The business of insurance is related to the protection of the economic values of assets. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it because it meets some of his needs. This benefit may be an income or in some other form. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor car, it provides comfort and convenience in transportation, there is no direct income. Both are assets and provide benefits. Every asset is expected to last for a certain period of time during which it will provide the benefits, after that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it incapable of giving the benefits. An epidemic may kill the cow suddenly. In that case, the owner and those enjoying the benefits there from, would be deprived of the benefits. The planned substitute would not have been ready. There is an adverse or unpleasant situation. Here, insurance helps to reduce the effects of such adverse situations.
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Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. (For background reading, see The History Of Insurance In America.) Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say "significant" because if the potential loss is small, then it doesn't make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most. Insurance is appropriate when you want to protect against a significant monetary loss. Take life insurance as an example. If you are the primary breadwinner in your home, the loss of income that your family would experience as a result of our premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums ensure that if you die, your income will be replaced by the insured amount. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense. (For more insight, see 15 Insurance Policies You Don't Need.) Everyone that wants to protect themselves or someone else against financial hardship should consider insurance. This may include:
Protecting family after one's death from loss of income Ensuring debt repayment after death Covering contingent liabilities Protecting against the death of a key employee or person in your business Buying out a partner or co-shareholder after his or her death Protecting your business from business interruption and loss of income Protecting yourself against unforeseeable health expenses Protecting your home against theft, fire, flood and other hazards Protecting yourself against lawsuits Protecting yourself in the event of disability Protecting your car against theft or losses incurred because of accidents And many more
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Insurance Contract
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Insurance Classification
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Insurance provides compensation to a person for an anticipated loss to his life, business or an asset. Insurance is broadly classified into two parts covering different types of risks: 1. Long-term (Life Insurance) 2. General Insurance (Non-life Insurance)
Long-term Insurance
Long term insurance is so called because it is meant for a long-term period which may stretch to several years or whole life-time of the insured. Long-term insurance covers all life insurance policies. Insurance against risk to one's life is covered under ordinary life assurance. Ordinary life assurance can be further classified into following types: Types of Ordinary Life Assurance 1. Whole Life Assurance 2. Endowment Assurance Meaning In whole life assurance, insurance company collects premium from the insured for whole life or till the time of his retirement and pays claim to the family of the insured only after his death. In case of endowment assurance, the term of policy is defined for a specified period say 15, 20, 25 or 30 years. The insurance company pays the claim to the family of assured in an event of his death within the policy's term or in an event of the assured surviving the policy's term. i).Child's Deferred Assurance: Under this policy, claim by insurance company is paid on the option date which is calculated to coincide with the child's eighteenth or twenty first birthday. In case the parent survives till option date, policy may either be continued or payment may be claimed on the same date. However, if the parent dies before the option date, the policy remains continued until the option date without any need for payment of premiums. If the child dies before the option date, the parent receives back all premiums paid to the insurance company. ii). School fee policy: School fee policy can be availed by effecting an endowment policy, on the life of the parent with the sum assured, payable in instalments over the schooling period. 4. Term Assurance The basic feature of term assurance plans is that they provide death riskcover. Term assurance policies are only for a limited time, claim for which is paid to the family of the assured only when he dies. In case the assured survives the term of policy, no claim is paid to the assured. Annuities are just opposite to life insurance. A person entering into an annuity contract agrees to pay a specified sum of capital (lump sum or
5. Annuities
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by instalments) to the insurer. The insurer in return promises to pay the insured a series of payments untill insured's death. Generally, life annuity is opted by a person having surplus wealth and wants to use this money after his retirement. There are two types of annuities, namely: Immediate Annuity: In an immediate annuity, the insured pays a lump sum amount (known as purchase price) and in return the insurer promises to pay him in installments a specified sum on a monthly/quarterly/half-yearly/yearly basis. Deferred Annuity: A deferred annuity can be purchased by paying a single premium or by way of installments. The insured starts receiving annuity payment after a lapse of a selected period (also known as Deferment period). 6. Money Back Policy Money back policy is a policy opted by people who want periodical payments. A money back policy is generally issued for a particular period, and the sum assured is paid through periodical payments to the insured, spread over this time period. In case of death of the insured within the term of the policy, full sum assured along with bonus accruing on it is payable by hte insurance company to the nominee of the deceased.
General Insurance
Also known as non-life insurance, general insurance is normally meant for a short-term period of twelve months or less. Recently, longer-term insurance agreements have made an entry into the business of general insurance but their term does not exceed five years. General insurance can be classified as follows: Fire Insurance Fire insurance provides protection against damage to property caused by accidents due to fire, lightening or explosion, whereby the explosion is caused by boilers not being used for industrial purposes. Fire insurance also includes damage caused due to other perils like strom tempest or flood; burst pipes; earthquake; aircraft; riot, civil commotion; malicious damage; explosion; impact. Marine Insurance Marine insurance basically covers three risk areas, namely, hull, cargo and freight. The risks which these areas are exposed to are collectively known as "Perils of the Sea". These perils include theft, fire, collision etc. Marine Cargo: Marine cargo policy provides protection to the goods loaded on a ship against all perils between the departure and arrival warehouse. Therefore, marine cargo covers carriage of goods by sea as well as transportation of goods by land.
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Marine Hull: Marine hull policy provides protection against damage to ship caused due to the perils of the sea. Marine hull policy covers three-fourth of the liability of the hull owner (shipowner) against loss due to collisions at sea. The remaining 1/4th of the liability is looked after by associations formed by shipowners for the purpose (P and I clubs). Miscellaneous As per the Insurance Act, all types of general insurance other than fire and marine insurance are covered under miscellaneous insurance. Some of the examples of general insurance are motor insurance, theft insurance, health insurance, personal accident insurance, money insurance, engineering insurance etc.
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ROLE OF WOMEN:
It is true that the worth of a civilization can be measured by the place that it gives to women in the society. It is also true that where women are honored, there gods live. Indian Women in the past enjoyed an exalted position in the society. They excelled in various spheres of life and enjoyed every kind of liberty to develop themselves, socially, morally and intellectually. However, the position did not remain the same for long. During Muslim and British rule, her position was eclipsed. She was deprived of a wide measure of liberty and was confined within the four walls of the house. She was thought more as a possession than a human being. She was reduced to be a play thing of man and an object to gratify his lust, whims and fancies.
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Women in India have an advantage when it comes to insurance: they still pay lower premiums than their male counterparts do. Preferential rates for women were prevalent around the world until recently. Since 21 December 2012, the European Union ended this
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Life insurance
The percentage of women owing a life insurance is miniscule compared to men. To bridge this gap, insurance companies have launched policies targeted towards the gender. Some of them include Max New York Life Platinum Protect Plan, SBI [ Get Quote ] Life Saral Shield, Aviva [ Get Quote ] Life Shield Plus, Met Protect Plan and Kotak Term Plan. These are term plans - there are no returns in these policies. Compared to policies for men, the premium is lower. This is because; women have lower mortality (death) rate as compared to men. If you want investment-linked life insurance policy, LIC [ Get Quote ] has added one to its portfolio that suits the need of women. The policy, LIC Jeevan Bharti, is eligible for bonus and provides add-on covers for accident benefit, critical illness benefit and congenital disability benefit. Health insurance A comprehensive health insurance is as important as a life cover. Many ailments such as arthritis, spondylitis and deficiency of haemoglobin affect women at an early age. A good medical cover can help them take care of the treatment costs. Moreover, a good health insurance cover comes very handy at the time of maternity and childbirth as they offer 'maternity benefits', 'childbirth benefits' and 'pre and post natal care'. Some of such policies include Apollo Munich's Easy Health, Max Bupa's Heartbeat and Star Health's Wedding Gift.
Car insurance
Even though women drive less than men do, they are more prone to accidents, according to researches. Irrespective of this, car insurance is necessary if you are taking the wheel.
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Ovarian cancer Breast cancer Vaginal cancer Cervical cancer Uterine or endometrial cancer Burns Fallopian tube cancer Paralysis or multitrauma
The plan also provides congenital disability benefits whereby 50 percent of the sum assured is provided in case the lady delivers a child with at least one of the following congenital defects: Downs syndrome Cleft palate with or without cleft lip Congenital cyanotic heart disease Spina bifida Tracheo-esophageal fistula If there is a claim as per the Section I on critical illness then the policy will provide a Childrens Education Bonus for the education of at least 1 child. However, the amount provided in this case will be previously fixed by the service provider. If the insured loses her job within a 3 month period of being diagnosed with a critical illness, as specified by the insurer, she will receive INR 25 thousand to cover the job loss. However, the claim should be made as per Section I. HDFC Life Insurance: The HDFC Life Smart Woman Plan provides coverage against
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A benefit amount if the policyholder is diagnosed with any one of the 11 previously specified critical illnesses. Greater benefits are provided if it is cancer Convalescence benefit for treatment after hospitalization Cashless hospitalization at more than 3000 hospitals across the country that are part of the network Cosmetic reconstruction surgery benefit in case of accidental injuries Hospital cash benefits on a daily basis Income tax benefits as per Section 80D More hospital cash in case of admissions to ICCU or ICU
Apart from the above mentioned ones, interested people can also opt for individual health plans being provided by the top insurers in India.
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Some of the important Insurance policies for women provided by LIC are: Easy Health Individual Plan: Easy Health Individual Plan provided by Apollo Munich is a comprehensive health insurance plan that can be purchased by men or women. The plan if chosen by women includes in it all the health benefits offered by other plans and also certain maternity benefits suitable for pregnant women. JEEVAN BHARATI-I (PLAN No. 192): Launched on July 30 2008 by LIC India this plan is an exclusive insurance policy for women. Especially deigned for working women the JEEVAN BHARATI-I (PLAN No. 192 is a money back policy. The benefits offered to the ensured under this plan include optional Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit. The maximum and minimum amount that the insured will receive would be ` 50,000 and ` 2,50,000 respectively. Vijaya Raji Janani Kalyan Yojana : Vijaya Raji Janani Kalyan Yojana by United India Insurance company is designed keeping in mind the development and welfare of women of the state of Madhya Pradesh. Swayam Shakti Suraksha; Swayam Shakti Suraksha is currently among the best insurance policies for women in India. A joint venture between one of the biggest microfinance companies in the country SKS Finance's Bajaj Allianz Swayam Shakti Suraksha supports around 1 million women across the country. The policy supports around 3.6 million women in rural India across 18 states. Known as one of the cheapest polices the tenure of this plan extends to 5 years. The policy can be started with just depositing an amount of ` 500
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Benefits On Survival
On surviving premium paying term, full sum assured is paid as survival benefit. The policy continues with risk cover and participates in profit up to age 50 years. On the life assured surviving up to date of maturity only vested bonuses will be payable, the sum assured having already been paid as survival benefit. If the life assured gets married, insurance cover commences for husband. If the husband pre-deceases the life assured during the term of the policy, full sum assured without bonuses is payable. The contract does not come to an end and continues on the life of the woman and participates in the profit.
On Death
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In case the life assured dies before the risk is commenced (i.e. during deferred period), premiums paid (including pwb premiums) are refunded and the contract comes to an end. In case of the death of life assured after the risk commences, but before date of maturity, full sum assured along with vested bonuses are payable.
Other Conditions
Minimum sum assured:Rs.30,000. Maximum sum assured:Rs.5,00,000. Minimum premium must be Rs.800 per annum No medical exam if the age of the child is less than 10 years. Proposals from children who are not attending school even after 5 years of age will not be entertained. A joint declaration signed by both parents declaring state of health of the child is required to be submitted. The period from date of commencement of policy to the date of commencement of risk is known as waiting period. Waiting period in no case will be less than 2 years. No Accident Benefits and Extended Permanent Disability Benefit (EPDB) under this plan. Permanent Disability Benefit (PDB) only from date of vesting. Evidence of marriage : o Marriage certificate. o Letters from two respectable persons who attended the marriage
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Eligibility Minimum age at entry Maximum age at entry: Maximum age at maturity Maximum term of the policy Minimum sum assured Maximum sum assured Mode of payment
Features
This plan is designed exclusively for women for providing funds in time of need like marriage, sickness, education etc. All female lives between 18 & 50 can secure the policy. Physically handicapped women are also eligible subject to certain conditions. Periodic returns of sum assured with facility to encash at will. Attractive benefits if retained with LIC. Unique provision for payment of guaranteed additions and loyalty addition. Life cover continues despite non-payment of premium. Also covers pregnancy and childbirth risk along with accident benefit at no extra cost. Flexibility in premium payment. Offers an option for pension (annuity) on maturity.
Benefits
On survival On survival Amount of money back On a policy of Rs up to (% of sum assured) 1,00,000 5 years 20% Rs 20,000 10 years 20% Rs 20,000 15 years 20% Rs 20,000 Date of 40% + guaranteed additions Rs 40,000 maturity + loyalty additions On Death
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Guaranteed additions
The guaranteed additions @ Rs.70/- per Rs 1,000 sum assured for each year premium paid, will be payable with maturity or death claim.
Loyalty addition
If the premiums are paid for at least 5 years, loyalty addition may become available along with the claim payment.
Special benefits
Encashment of survival benefits as and when needed The policyholder at her option may avail of the survival benefit any time on or after its due date. If opted to avail later, increased survival benefit (increment @11% compounded yearly) will be payable. Free insurance cover After two years premiums have been paid, whenever premium payment is discontinued, the risk cover for full sum assured will continue for 3 years from the due date of first unpaid premium. Accident benefit Accident benefit is available under this policy and is admissible during the period of extended cover of 3 years also without any extra premium. Flexibility in premium payment The policyholder can pay next premium in advance at her convenience, for which a rebate @ 10% will be available. Advance payment can also be in installments - not more than 3. Pregnancy and childbirth risk is also covered (with some exceptions) without extra premium if the policy is in force. Option for annuity The policyholder can opt for a pension (annuity) in lieu of the maturity amounts. (The option should be exercised 6 months before date of maturity). The annuity rates prevalent at the time of maturity will be applicable.
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Mediclaim policies in India such as maternity insurance are offered by insurance firms as a component of group insurance policies to corporate houses. None of the general insurance firms provide complete Insurance Policy for Pregnant Women as the coverage shields only unanticipated risk cover and maternity is not categorized under this. Moreover, there are no particular parameters or consistency among the various pregnant women insurance benefits, either in its inclusions or in its omissions. However, there are few firms offering maternity insurance policies but they rarely cover maternity expenses that take place within the nine months of buying the scheme.
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United Indian
The United India Insurance Co was established on February 18, 1938. In 1972 the general insurance industry was nationalized and afterwards 12 Indian insurance organizations, the Indian arms of 5 international insurers, 4 cooperative insurance societies, and LIC's general insurance operations in southern India merged together with the organization. At present the insurer has 1340 offices with a combined work force of 18300 workers and caters to more than a crore policyholders. It specializes in a wide range of insurance products.
United India Insurance has been one of the prominent names when it comes to creating and providing insurance products for big organizations such as the following: ONGC Ltd Mumbai International Airport GMR Tirumala - Tirupati Devasthanam Hyderabad International Airport It has also been a leading name when it comes to providing insurance products to the rural areas and has been at the forefront of implementing the Vijaya Raji Janani Kalyan Yojana that covers 45 lakh women in Madhya Pradesh and the Government of India's Universal Health Insurance Programme. It has also played a leading role in implementing the Tsunami Jan Bima Yojana that covers 4.59 lakh families across 4 states as well as the National Livestock Insurance. United India Insurance has also expanded its presence to 200 and more tier II and tier III towns, and villages through its various micro offices.
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Even though it is ideal to take a women health insurance policy as early as possible, experts say that taking the insurance should not be delayed beyond 50 years. Since people also find it difficult to cope financially during the old age it is advisable to avail such a plan when the policyholder is working and capable of paying the premiums regularly. United India Insurance Company Limited (UIIC) is a leading General Insurance Company of India with its head quarters in Chennai, India. UIIC is wholly owned by the government of India. They have more than 72 years of experience in handling insurance business and three decades of experience in handling non life insurance plans. With more than 1340 offices spread across India United India Insurance Company covers more than 1 core policy holders. With a direct premium income of Rs.5000 crore in the financial year 2009-10, United India is a leading insurance Company in India. United India is also selected as one among the top three insurance companies in India by Asia Insurance review. They offer various types of Health Insurance or Mediclaim policies to suit every individual needs. These policies are marketed by the companies well appointed agents or specialized brokers.
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Women
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An Act to explain and amend the law relating to certain married women, for other purposes. Preamble:-Whereas it is expedient to make such provision as hereinafter appears for the enjoyment of wages and earnings by women married before the first day of January, 1866, and for insurances on lives by persons married before or after that day: And whereas by the Indian Succession Act, 1865, (10 of 1865) 1 See. 4 it is enacted that no person shall by marriage acquire any interest in the property the person whom he or she marries, nor become incapable of doing any act in respect of his or her won property, which he or she could have done, if unmarried: And whereas by force of the said Act all women to whose marriages it applies are absolute owners of all property vested in, or acquired by them, and their husbands do not by their marriage, acquire any interest in such property, but the said Act does not protect such husbands from liabilities on account of the debts of their wives contracted before marriage, and does not expressly provide for the enforcement of claims by or against such wives;
It is hereby enacted as follows:The relevant provision of the Indian Succession Act, 1925 (39 of 1925) 2. Extent and application.
1
[it extends to the whole of India except the State of Jammu and Kashmir.]
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A policy of insurance effected by any married man on his own life, and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall ensure
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STATE AMENDMENTS
Andhra Pradesh.- In its application to the State of Andhra Pradesh, in sub-section (2), for 'Madras" substitute "the State of Andhra as it existed immediately before the 1 st November 1956 or Madras". [Vide Andhra ALO, 1954 and Andhra Pradesh ALO, 1957.] Dadra and Nagar Haveli- In its application to the UnionTerritory of Dadra and Nagar Haveli(i) In Cl. (a) of sub-section (2) the following shall be added at the end or (iv) In the Union Territory of Dadra and Nagar Haveli on or after the commencement of the Dadra and Nagar Haveli (Laws) Regulation, 1963;" (ii) In Cl. (b) after the words "any territory" the words "other than the Union Territory of Dadra and Nagar Haveli" shall be inserted. (iii) After Cl. (b) the following shall be inserted. (c) By a Buddhist in the Union Territory of Dadra and Nagar Haveli, on or after the commencement of Dadra and Nagar Haveli (Laws) Regulation, 1963; (iv) In the proviso the following shall be added at the end "or (iii) Before the commencement of the Dadra and Nagar Haveli (Laws) Regulation, 1963, in any case to which sub-clause (iv) of Cl. (a) or Cl. applies. [Vide Regulation VI of 1963, Sec. 2 and Sch. I,] Tamil Nadu.- (a) In its application to the State of Tamil Nadu in Sub-section (2) for "Madras" the words 'Tamil Nadu" shall be substituted [Vide Tamil Nadu, A. L.O. 1970.]
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With the rise in affluence and increased product awareness, the middle class is fast emerging as the most lucrative segment of the Indian market for financial services companies. India has a large working population, with higher disposable income than in the past and therefore a greater propensity to buy products to meet their growing aspirations. However, due to rapidly evolving markets, customer loyalty to brands is fickle and very much dependent on price points, customer service and innovative product offerings. Only one in five Indian consumers say they are extremely loyal to their favorite brands.
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MUMBAI: Parents looking to save for their children's education have always been the biggest target group for life insurers, followed by those planning for retirement. Of late, however, companies have started focussing on another category of prospective policyholders - women. The latest entrant in this space is HDFC Life, which unveiled a Ulip customised for women on Friday. "The contribution of women to economic activity in India has seen a significant
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CONCLUSION
Nature has created men and women differently but their reason to buy life insurance remains broadly the same. Both men and women buy life insurance to protect their family, replace lost income in case he / she dies, provide for own retirement, fund long-term needs such as
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BIBLIOGRAPHY
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