Life insurance is an essential financial product with the life of the insured being the subject of protection. There are two types of life insurance: term and permanent. Term life insurance begins a low premium that increases upon renewal and pays a death benefit to the beneficiaries only if the insured dies within the policy term. On the other hand, permanent life insurance has a fixed premium and is designed to offer coverage for the insured’ s entire life. Both the insurance company will pay a death benefit to the designated beneficiary after the death of an insured. Although term and permanent life insurance behave as protections to ensure the beneficiary’s benefit, they have different features: convertibility, cost, and cash surrender value.… Read the rest
Insurance Management
Bancassurance – Meaning, Need and Advantages
With the opening up of the insurance sector and with so many players entering the Indian insurance industry, it is required by the insurance companies to come up with innovative products, create more consumer awareness about their products and offer them at a competitive price. New entrants in the insurance sector had no difficulty in matching their products with the customers’ needs and offering them at a price acceptable to the customer. But, insurance not being an off the shelf product and one which requiring personal counseling and persuasion, distribution posed a major challenge for the insurance companies. Further insurable population of over one billion spread all over the country has made the traditional channels of the insurance companies costlier.… Read the rest
Legal Aspects of Marine Insurance
A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the insured, against marine losses, that is to say, the losses incidental to marine adventure. It is a contract of indemnity. It is a contract ‘uberrimae fidei”. It must have insurable interest. The doctrine of subrogation applies to it.
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- Marine Insurance
- Marine Insurance Claims
Marine Adventure: There is a marine adventure when;
- Any ship, goods or movable property(i.e. insurable property) is exposed to maritime perils;
- The earning or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or the security for any advances, loans or disbursements is endangered by the exposure of insurable property to maritime perils;
- Any inability to a third party maybe incurred by the owner of, or other person interested in, insurable property by reason of maritime perils.
Fire Insurance – Definition, Characteristics and Policy Types
Fire insurance is the oldest form of insurance. In the early development of industrial society, fire was the main source of energy. The industrial or commercial activities were not possible without fire. However, there was a need to insure the risk of uncontrolled or uncertain fire. Fire insurance is designed to provide for financial loss to property due to fire and a few other related hazards. The property that can be covered under fire insurance includes Building, Machinery, Equipments, Accessories, Goods, Raw Materials, Electrical Installation of building, Residential houses, Furniture and fittings, Pipelines located outside and inside the building.
A contract of fire insurance is a contract whereby the insurer undertakes, in consideration of the premium paid, to make good any loss or damage caused by fire during a specific period.… Read the rest
Group Insurance
Under the Group Insurance Scheme, the principle involved is more or less same as in the case of Life Insurance but the scheme is taken for a group of persons employed in an undertaking. In this scheme, the contract of life insurance can be summed up as an undertaking to pay specified amounts of money on the happening of certain contingencies in exchange for a previously agreed series of payments called premiums. This contract is between an employer and the Insurance Company and the contingencies where the death of employee in service or on survival to the retirement date. In the latter event the employer would possibly want some pension to be given for the post retirement life time of the employee.… Read the rest
Re-Insurance and Double Insurance
Re-insurance and double insurance contracts are two different concepts and are detailed here under. They both are similar to the contract of insurance, however, they have their own nature and the contract goes on as per the requirement.
Re-insuranceEvery insurer has a limit to the risk that he can undertake. If at any time a profitable venture comes his way, he may insure it even if the risk involved is beyond his capacity. Then in order to safeguard his own interest, he may insure the same risk either wholly or partially with other insurers. This is called re-insurance. The reason for re-insurance like the reason for original insurance is the necessity of spreading the risk.… Read the rest