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What is Life Insurance ?

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What is Life Insurance ?


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. Essentially life insurance provides financial protection to your family and dependents in the event of any unforeseen event or your untimely death. To cover you under a life insurance policy, an insurance company will charge you a certain sum of money (called the premium) periodically.
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What is Life Insurance ?


The premium paid helps cover the risk that the life insurance company takes by insuring your life and in turn entitles your family to receive a fixed lump sum.

The premium you pay depends on a variety of factors including age, health and the amount of life cover you want to name a few. However, premiums are typically lower for younger, healthier people, so starting early is always beneficial for you.
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Commercial mechanism for transferring risk and spreading loss Economic Concept of Insurance: 1. Insurer offers policy to cover specified risks 2. Insurer collects policy premiums from customers 3. Insurer invests premiums 4. Insurer pays money to insured customers in the event of losses covered by policy.

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Life Insurance is required because of the following factors


Life Insurance takes care of those who are financially dependent on you even when you are not around to look after them. Retirement planning requires wise investments during your working life in order to live comfortably during retirement. A good retirement plan takes care of your retirement, as there is no guarantee of a consistent income post retirement.

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Life Insurance is required because of the following factors


The expenses you may incur in future will keep increasing due to inflation, thus even a fluctuation in your income may lead to a compromised lifestyle,
Limited access to information and the time constraints you have may lead to inefficient management of your investments resulting in grim returns.

Savings plan enables individuals to secure their financial future by helping you to get attractive returns.
www.LifeInsuranceDirect.com. Your limited appetite to take risk may hinder you from au

parking your savings into pure equity options.

Insurance Protection:
Savings through life insurance guarantee protection against risk of death of the saver. full

Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved(with interest) is payable.

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Insurance Law
Sources of Insurance Obligations Policy/Insurance Agreement Common Law (contract theories; tort theories)Statutes Regulations The law of insurance is multilayered. The prudent researcher will consider each of the layers when approaching a research problem.

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The History of Insurance


113000 B.C.E. Mesopotamian merchants assess risk surcharges in transactions with caravan operators and traders to protect their capital. 1750 B.C.E. Code of Hammurabi formalizes concepts of bottom and respondent (protection against loss of hull and cargo, respectively) the underpinnings of maritime insurance.

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The History of Insurance


121574 Queen Elizabeth I grants to Richard Candler the right to establish an insurance office in the Royal Exchange Building for the preparation and registration of policies.1601 Britains Parliament enacts the Assurances Act of 1601 creating an assurance commission for resolving policy disputes. 43 Eliz. 1 c. 12.

131666 Great Fire of London. Shortly thereafter, Nicholas Brabon opens the first fire insurance office in England. It eventually becomes The Phoenix Assurance Company. Over the next two decades, more fire insurance companies start up. 1690s Fire insurance companies form the first professional fire brigades.14

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The History of Insurance


Lloyds of London Late 1600s Edward Lloyds Coffee House. Seafarers, merchants and insurers meet for insurance business and coffee. Lloyds of London1688 Edward Lloyd starts a shipping newspaper and reads out shipping news from a pulpit in his coffee house; attracts even more ship owners and insurers16

1751 Benjamin Franklin and other capitalists start the Philadelphia Contributor ship, the first successful fire insurance company in America.
18Mid-18th Century Many insurance companies are more likely than banks to have substantial cash reserves. Insurance companies function as lending institutions.Mid-18th Century Insurance underwriting is prosperous industry in America. Lloyds of London also draws a significant share of Colonial Americas underwriting business (capitalization). www.LifeInsuranceDirect.com. au

Tax Relief
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.

Assesses can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise

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General Insurance
Insurance other than Life Insurance falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc

The non-life insurance sector is on an upswing! The non-life insurance industry in India has grown by over 16 % p.a. over the last 5 years. There is a vast business potential that lies untapped, as more and more cities enter the development phase.
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Insurance For Women


Prior to nationalization (1956), many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. However, after nationalization of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time-to-time. At present, women who work and earn an income are treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the female is up to30 years and www.LifeInsuranceDirect.com. if she does not have an income attracting Income Tax au

What is Life Insurance ?

www.LifeInsuranceDirect.com. au