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. Read More: 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. ‘Insurable property’ means any ship, goods or other movables whichContinue reading

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. Also due to heavy competition, insurers do not enjoy the flexibility of incurring heavy distribution expenses and passing them to the customer in the form of high prices. With theseContinue reading

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-insurance Every 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. Re-insurance can be resorted to in all kinds of insurance. The insurer has an insurable interest in the subject-matter insured to the extent of the amount insured by him because a contract of re-insuranceContinue reading

Differences Between Term and Permanent Life Insurance

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. For instance, term and permanent policy offer different periods of validity. Term life insurance provides guarantees for a limited set of years, generally between 10 to 30 years.Continue reading

Evolution and Development of Life Insurance in India

Life insurance in the modern form was first set up in India through a British company called the Oriental Life Insurance Company in 1818 followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. All these companies operated in India but did not insure the lives of Indians. They insured the lives of Europeans living in India. Some of the companies that started later did provide insurance for Indians, as they were treated as “substandard”. Substandard in insurance parlance refers to lives with physical disability. Pioneering efforts of reformers and social workers like Raja Rammohan Ray, Dwarakanath Tagore, Ramatam Lahiri, Rustomji Cowasji and others led to entry of Indians in insurance business. The first Indian insurance company under the name “Bombay Life Insurance Society” started its operation in 1870, and started covering Indian lives at standard rates. Later “Oriental Government Security Life InsuranceContinue reading

Insurance – Definition, Principles and Functions

Life is a roller coaster ride and is full of twists and turns. Insurance policies are a safeguard against the uncertainties of life. As in all insurance, the insured transfers a risk to the insurer, receiving a policy and paying a premium in exchange. The risk assumed by the insurer is the risk of death of the insured in case of life insurance. Insurance policies cover the risk of life as well as other assets and valuables such as home, automobiles, jewelry etc. On the basis of the risk they cover, insurance policies can be classified into Life Insurance and General Insurance. Life insurance products cover risk for the insurer against eventualities like death or disability. General insurance products cover risks against natural calamities, burglary, etc. Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. With the help of Insurance,Continue reading