ASPECTS OF LIFE INSURANCE

WHAT IS INSURANCE ??
Insurance is a way of buying peace of mind that if you suffer an
unfortunate, unpredictable loss you will receive financial compensation
from the insurer.
This compensation is meant to put you back in the same financial
position you enjoyed before the loss or make a specified benefit
payment

HOW DOES INSURANCE WORK ??

By collecting a sum of money from each person wishing to have insurance,
the insurer creates a fund from which he eventually pays the losses of those
policyholders who suffer a loss. In this way the contributions of the many pay
for the losses of the few.
The contribution or "premium" you pay into the fund depends on:
the size of the risk you want to cover since this will affect the size of the
"claim" or amount you will be entitled to take from the fund; and
the likelihood of a claim occurring, which is calculated on the basis of past
experience and the expertise of the insurer.

WHY DO ONE NEED INSURANCE?

We can give countless examples of unexpected events that may cause family to
suffer a financial loss:
An unexpected event could happen, such as a fire in your home. Your most
valuable investment and possession could be destroyed.
You may be on holiday and lose your baggage.
You may meet with an accident that costs you your life. Your family will need the
financial support that you previously gave them. In some cases, you may turn to
state benefits for compensation but these are usually low; besides, you must
make sure that you qualify for them.
Moreover, there are situations that impose a legal obligation to be insured, such as
when driving a car or other motor vehicle.

WHAT IS LIFE INSURANCE?

Life insurance offers valuable financial protection in the event of your early
death and makes a payment to your beneficiaries, heirs or family members
dependent on your selected sum assured and earnings.
But it may also be a means of saving. This combination of protection and
saving makes life insurance unlike any other financial product.
Some policies protect, some help you to save and some do both.

CONTI ..
A life insurance is a long term contract which may mean that for a
number of years, you have to pay a periodic premium to your life
insurance company and it was not 'annually renewable'.
When you take out a life policy, you have to be sure that you would be
able to meet your obligations of premium payments on time and in full.
In certain circumstances, you may not be able to obtain the full value of
your insurance premium paid over the years if you surrender your policy
before its maturity or if you have missed premium payments.

TYPES OF LIFE INSURANCE

There are basically two types of life insurance,
Term life
Permanent life.

CONTI

Term insurance is used for several reasons, including (and not limited to):
Short term salary coverage.
Cover a debt.
A combination of both types of insurance is normally suggested, with term
being used for the short term and permanent for the long term.

PAYING OF PREMIUMS
Paying for your life insurance policy usually takes two basic forms:
Single Premium: a lump sum is paid at the beginning of the policy. No other
payments are made for the whole duration of the policy. Some policies may
allow you to "top-up" the amount at particular specified intervals during the
policy term.
Periodic Premium: this can be annual or in instalments e.g. monthly or
quarterly. An instalment premium would normally incur charges made to the
policyholder as a result of higher administration for the insurance company.

INDIAN INSURANCE REGULATOR

The Insurance Regulatory and Development Authority (IRDA) was established in
the year 1999 by the Indian Government, for two significant reasons
To safeguard the interest of the policy holders and for the up gradation of the
entire insurance sector right from the approach adopted by the existing insurance
companies towards their shareholders to the eradication of the shortcomings of
the industry.
The organization was set up under the guidelines of the Insurance Regulatory and
Development Authority Act, 1999.

FUNCTION OF INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY

Nomination by Policyholders
Settlement of insurance claim
Practical training for Insurance agents and other intermediaries
Insurable Interest
Surrender value of Policyholders
Code of conduct of Insurance intermediaries
Assistance in gaining correct information about policies
Creation of management information system
Promotion of Self regulation within the insurance sector

COMPOSITION OF AUTHORITY
As per the section 4 of IRDAI Act' 1999, Insurance Regulatory and
Development Authority of India(IRDAI, which was constituted by an act of
parliament) specify the composition of Authority
The Authority is a ten member team consisting of
(a) a Chairman; (Mr.T.S.Vijayan)
(b) five whole-time members;
(c) four part-time members,
(all appointed by the Government of India)

COMPANIES PROVIDING LIFE

INSURANCE IN INDIA

Life Insurance Corporation of India - LIC of India

AEGON Religare Life Insurance Company Ltd - AEGON Religare

Aviva Life Insurance

Bajaj Allianz Life Insurance Company Ltd BajajAllianz

Bharti AXA Life Insurance

Birla Sun Life Insurance Company Ltd - Birla SunLife

DHFL Pramerica Life Insurance Company Ltd - DHFL Pramerica

Edelweiss Tokio Life Insurance Company Ltd - Edelweiss Tokio

Exide Life Insurance Company Ltd - ING Vysya Life Insurance

Future Generali India Life Insurance Company Ltd - Future Generali

HDFC Standard Life Insurance Company Ltd - HDFC Life

HSBC Oriental Bank of Commerce (OBC) Life Insurance Company Ltd - Canara HSBC Life

CONTI.

ICICI Prudential Life Insurance Company Ltd - ICICI Pru Life

IDBI Federal Life Insurance Company Ltd - IDBI Federal

IndiaFirst Life Insurance Company Ltd - India First

Kotak Life Insurance

Max Life Insurance Company Ltd MaxLife

PNB MetLifeIndia Insurance Company - PNB MetLife Medicaim

Reliance Life Insurance

Sahara Life Insurance Company Ltd - Sahara Life

SBI Life Insurance Company Ltd - SBI Life

Shriram Life Insurance Company Ltd - Shriram Life

Star Union Dai-ichi Life Insurance Company Ltd - Star Union Dai-ichi

Tata AIA Life Insurance Company Ltd - Tata AIA Life