Chapter 1 How Inurance Market Operates

Contract b/w insurer and the insured in return of a premium How insurance works? Risk transfer

Benefits of Insurance

Investment option-can get return back on investments in addition to coverage. Protection of finances-provide compensation Tax benefits-premium upto 1 lakh qualifies for tax deductable and maturity benefit recieved by policyholder under 1 lakh is tax free

Needs based Selling

Customer gets what he's looking for rather than what company wants to sell.

Ppt 1 page 13 various insurance Acts.

IRDA was formed in April 2000 Malhotra Commitee set up in 93 and recommed reforms in 94

Under MC foreign companies were allowed in indian insurance market(but only thorugh joint ventures) Foreign companies cant have more than 26% stake in JV

23 life insurance companies in India 24 general insurance companies

Chapter 2 Concept of Risk Components of risk

Perils and hazards level uncertainity

Level of risk in assesed in terms of probability of its happening and extent(severity) of the event.

Types of hazards

Physical Hazards-refers to physical aspects of risk e.g family history of heart disease,high BP etc Moral hazards-refers to activities of individual that increases risk. May arise from state of mind i.e attitude and behaviour of individual. e.g consumption of alchohol or smoking.

Pooling of risk

e.g life insurance,car insurance,home insurance etc

Can withdraw contract within 15 days

Complaint da ans within 10 days copy of the proposal is to be supplied to the policyholder within 30 days of the completion of the contract. Grace period not less than 15 days for monthly premium not less than 30 days for quaterly,half yearly and yearly based premiums.

Ombudsman within 3 months 30 days

policy document is issued after FPR(First premium receipt)

Surrender value is payable when the policy has been in force for at least 3 years