Insurance can be defined as a legal contract between two parties whereby one party called insurer undertakes to pay

a fixed amount of money on the happening of a particular event, which may be certain or uncertain.

 Insurance constitutes one of the major segments of the financial market.

Insurance services play predominant role in the process of financial

intermediary. Today, insurance industry is one of the most growing sectors in India. Another major issue is the effects on LIC after the entry of private players in the market. Though market share of LIC has been affected, it has improved in terms of efficiency.
Right now the insurance industry has great opportunities in a country like

India or China which huge population.

India's insurance sector is zooming to show an unprecedented progressive

growth of more than 200% by the period of 2009-12

 The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners.

 Insurance is an Rs.400 billion business in India, and together

with banking services adds about 7% to Indias GDP.

It has been growing by 15 - 20% per annum. India also has the highest number of life insurance policies in

force in the world, and total investible funds with the LIC are almost 8% of GDP.

Percentage Value

100% 80% 60% 40% 20% 0% LIC Private Players

Years

Market Share [F.Y. 2009-10]

28% LIC Private Players 72%

 Insured:

The person known as the policyholder, a person with insurance coverage.

Insurer:

A company licensed to transact the business of insurance and issue insurance policies.
Policy:

It's the written contract between an insurance company and its insured. It defines what the company agrees to cover for what period of time and describes the obligations and responsibilities of the insured.

 Premium:

It's the amount of money a policyholder pays for insurance protection.

Claim:

It's the notice to the insurance company that under the terms of a policy, a loss maybe covered.
Indemnity:

An insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.

 Limit:

It's the maximum amount paid by the insurance company under the terms of a policy.
Underwriting:

The process of classifying applicants for insurance by identifying characteristics such as age, gender, health, occupation and hobbies.

Life Insurance

Term Life Policy Whole Life Policy Endowment Policy

Money Back Policy

Annuities and Pension

General Insurance

Fire Insurance
Marine Insurance Auto Insurance Health Insurance Others

 Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
Under Section 80 C 20% deduction is given on the premium amount on a maximum of Rs. 20000.

 Under a Term Life contract, the insurance company pays a specific lump sum to the designated beneficiary in case of the death of the insured. These policies are usually for 5, 10, 15, 20 or 30 years.
ADVANTAGES OF TERM LIFE INSURANCE DISADVANTAGES OF TERM LIFE INSURANCE

- If one survives the period of the policy, he / she does not get any money at the end of the policy. - The premium payable on these policies is low as they The premium on such policies keeps on increasing do not carry any cash value. with age mainly because the risk of death of older - One can afford for quite high value insurance policies people is more. Over the page of 60, these policies become difficult to afford.

 The premiums under this plan are payable from the date of

commencement to death of the date of the life assured, and the sum assured is payable by the insurer on death. interest on a tax-deferred basis.

A portion of the money paid as premiums is invested in a fund that earns

Thus, over a period of time, this policy will accumulate certain "cash

value" which you will be able to get back either during the period of the policy or at the end of the policy. interest on a tax-deferred basis.

A portion of the money paid as premiums is invested in a fund that earns

Thus, over a period of time, this policy will accumulate certain "cash

value" which you will be able to get back either during the period of the policy or at the end of the policy.

 The most popular plan of life insurance, which is a very fine combination of term assurance and endowment in equal amounts, is the endowment policy. An endowment plan provides for the payment of the sum assured at the end of a specified term or earlier death. A pure endowment policy is therefore a form of financial saving, whereby the person covered remains alive beyond the tenure of the policy, he gets back the sum assured with some other investments

It is a combination of whole life and endowment type plans. These policies provide for periodic payments of partial survival benefits during the term of the policy itself. A unique feature associated with this type of policies is that in the event of death of the insured during the policy term, the designated beneficiary will get the full sum assured without deducting any of the survival benefit amounts, which have already been paid as money-back components. Moreover, the bonus on such policies is also calculated on the full sum assured.

Annuities start where life insurance ends. It is called the reverse of life insurance. In annuity contracts, a person agrees to pay to the insurer a specified capital amount in lump sum or in installments in returns for a promise from the insurer to make a series of payment to him so long as he lives. Theoretically, under a life insurance contract, the insurer starts paying upon the death of the insured and under an annuity contract, the insurer stops paying upon death of the annuitant. In actual practice however, there are many variation of the annuity contribution. The risk that is sought to be covered under annuity contracts is of living too long. Annuity may be defined as a series of periodic payment to an annuitant (the person receiving the benefit), for life on other agreed terms or conditions, in returns for a single payment or series of payments (consideration account).

 Insuring anything other than human life is called general

insurance.

Injury due to accident or hospitalization for illness and

surgery can also be insured.

Your liabilities to others arising out of the law can also be

insured.

Most general insurance covers are annual contracts.

However, there are few products that are long-term.

 Fire insurance is a form of property insurance which protects people from the costs incurred by fires.
When a structure is covered by fire insurance, the insurance policy will pay out in the event that the structure is damaged or destroyed by fire . Depending on the terms of the policy, fire insurance may pay out the actual value of the property after the fire, or it may pay out the replacement value. In a replacement value policy, the structure will be replaced in the event of a fire, whether it has depreciated or appreciated:

 Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination. Cargo insurance, discussed here is a sub-branch of marine insurance, though Marine also includes Onshore and Offshore exposed property (container terminals, ports, oil platforms, pipelines);

 Auto insurance (also known as vehicle insurance, gap insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.

The specific terms of vehicle insurance vary with legal regulations in each region.

 Health insurance is insurance against the risk of incurring medical

expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium to ensure that money is available to pay for the health care benefits specified in the insurance agreement

 Home insurance, or house-owner/householder insurance as it is also

known, is important, and you should purchase one.

Be it a humble hut or a bungalow, rented or owned, it is advisable to

insure your house and belongings to guard against unforeseen risks.

In addition to protecting your home, the typical home insurance covers

your valuable personal property as well. Your personal property could consist of your furniture, clothing, stereo, computer equipment, jewelry etc.

 Travel insurance is insurance that is intended to cover medical expenses, financial default of travel suppliers, and other losses incurred while traveling, either within one's own country, or internationally. Temporary travel insurance can usually be arranged at the time of the booking of a trip to cover exactly the duration of that trip, or a "multi-trip" policy can cover an unlimited number of trips within a set time frame.

 Aviation insurance is insurance coverage geared specifically to the

operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporate aviation terminology, as well as terminology, limits and clauses specific to aviation insurance.