LIFE INSURANCE FOR THE UNDER-PRIVILEGED


Life insurance for the under-privileged

Under-privileged persons are those persons whose incomes are too low to purchase life insurance policies, who have no adequate provision for old age and family security and who become incapable to earn adequate income due to accident injury or disease. For them, four alternatives are generally provided in life insurance, which are i). Industrial life insurance, ii). Disability benefits policies, and iv). Pension plans.

Industrial life insurance

Industrial life insurance is a form of life insurance specially designed to meet the requirements of wage earning population of industry. It may also apply to low income classes of business or even of the population. It may be issued without medical examination. The premiums may be collected by agents on weekly or monthly basis. Industrial insurance should not be confused with social insurance, which means workmen’s compensation, employers, liability, etc.

Purpose

The main purpose of industrial life insurance is to provide at least clean up funds to meet lest expenses of the assured. Since, the amount of industrial life insurance is not much, family protection is not always possible. The second aim is to educate the habit of saving amongst the low income group to meet their contingencies. Weekly premium can be easily saved and it may provide funds to create property.

INSURANCE OF DIFFERENT TYPES

1. Hull insurance

Insurance of vessel and its equipments are included under hull insurance. There are a number of classification of vessels such as ocean steamers, sailing vessels, builders, risks, fleet policies and so on.

2. Cargo insurance

It may be written under a single risk policy or floating policies. The cargo may be of any description, for example, wares, merchandise, property, goods and so on.

3. Freight insurance

Freight is to be payable for the carriage of cargoes or if the vessel is chartered, the money to be paid for the use of the vessel. The carriage is unable to earn freight if the goods or property (called cargoes ) are not safely transported.

4. Liability insurance

The marine insurance policy may include liability hazards such as collision or running down. Insurance can also be taken for the expense involved in non-compliance of rules and regulations without any intention to deceive. It should be clear here that marine perils insurance covers not only the “ocean but also the inland perils”. The perils to be included in the policy are clearly defined and the insurer will be liable only for the insured perils.

FIRE INSURANCE

Fire insurance

Fire insurance is a device to compensate for the loss consequent upon destruction by fire. Thus the fire insurer shifts the burden of fire losses from their actual victims over to all the members of the society. It is a cooperative device to share the loss. It relieves the insured from the horror of the fire losses to which he is exposed.

Functions

It is a well-known fact that the fire causes huge losses every year. The individual owner by taking fire insurance can prevent the fire waste to some extent. The insurer acts as a middle man between all the members of the society who are exposed to the fire risk on the one hand and the members who will be the actual victims of the fire losses on the other. The insurer charges the premium from all the insured members and makes good the losses when they occur to any of them.

The system of fire insurance cannot save the society from the economic loss to the community to the extent of the property lost by fire, but it compensates someone and this saves him from a ruinous loss, at the cost of group of some others.

MOTOR INSURANCE

Motor insurance burglary and personal accident insurance

Motor insurance got recently a great momentum. In the older times, persons, who were injured or killed through the negligence of the motorists, could not get financial redress either to them or to their legal heirs because no scheme of insurance was present at that time. To mitigate the financial hardship caused to the persons, the motor vehicles act, 1939, as amended from time to time, has made it compulsory for the motorists to insure against the risk of liability to third parties.

The rate of premium is standardised because the business is tariff. No insurer can charge lower rates than the tariff rates and no insurer can grant benefits exceeding than those prescribed by the tariff.

Vehicles for the purpose of insurance are classified as below:-

1 private cars

2 commercial vehicles such as goods carrying vehicles, passenger vehicles, tractors and others.

3 motor cycles, scooters and autocycles.

Kinds of policies:-

The policies under motor insurance are as follows:-

Act policies

Third party policy

Comprehensive policy

1.

Th

3.

REINSURANCE

REINSURANCE

Reinsurance is an arrangement whereby an original insurer who has insured a risk insures a part of that risk again with another insurer, that is to say, reinsures a part of the risk in order to diminish his own liability. The difference between the retention and the total amount of acceptance is reinsured. The limiting or retention and effecting of reinsurance brings about a wider distribution of the risks and secures to the insurer the full advantages of the law of average.

Limits

It is usual to fix a limit up to which the insurer is prepared to lose on risks in a specified class. The limit depends upon the following circumstances:

1. The financial status and premium income of the isurer. A new insurer with small premium income cannot afford to sustain a loss which might be borne with ease by established insurer with sample reserve.

2. The experienced in a particular class of risk:

i. The degree of the fire hazard present.

ii. The extent of the damage likely to be sustained.

iii. The fire extinguishing facilities available.

3. The limit will vary according to the nature and size of the concerns proposing for insurance.

4. Location and other factors affecting the risk are also taken into account while calculating the amount of limit.

Retention

After deciding the limit, retention can be easily fixed. Retention is the amount of maximum liability which the insurer can assume on a particular risk. The retention is determined according to the class to which it belongs and to its merits and demerits. The retention is also decided upon the total amount of insurance in force, the average size of its policies and the amount of surplus fund available with it. It also depends upon the size of company, age of issue, the type of policy and the class of risk.

Reinsurance

Reinsurance is the transfer of insurance business from one insurer to another. The insurer transferring the business is called the ‘principal’ or ceding or original office and the office to which the business is transferred is called for ‘reinsurer or ‘guaranteeing office’. It is also a contract of indemnity. The original company must disclose all the material facts to the reinsurer. At the time of loss the reinsurer indemnifies the loss up to the amount of reinsurance. The reinsurance amount is obtained by deducting retention amount from the original policy amount.

IMPORTANCE OF INSURANCE

The process of insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern affairs. Not only does it serve the ends of individuals, or of special groups of individuals, it tends to pervade and to transform our modern social order, too. The role and importance of insurance, here, has been discussed in three phases: 1) uses to individual 2) uses to a special group of individuals ie business or industry and 3) uses to the society.

USES TO AN INDIVIDUAL
1. Insurance provides security and safety
The insurance provides safety and security against the loss on a particular event. In case of life insurance payment is made when death occurs or the term of insurance is expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. In other words, security against premature death and old age sufferings are provided by life insurance. Similarly, the property of insured is secured against loss on a fire in fire insurance. In other insurance, too, this security is provided against the loss at fire, against the loss at damage, destruction or disappearance of property, goods, furniture and machines, etc.

2. Insurance affords peace of mind
The security wish is the prime motivating factor. This is the wish which tends to stimulate to more work, if this wish is unsatisfied, it will create a tension which manifests itself to the individual in the form of an unpleasant reaction causing reduction in work. The security banishes fear and uncertainty, fire, windstorm, automobile accident, damage and death are almost beyond the control of human agency and in occurrence of any of these events may frustrate or weaken the human mind. By means of insurance,however, much of the uncertainty that centres about the wish for security and its attainment may be eliminated.

3. Insurance protects mortgaged property
At the death of the owner of the mortgaged property, the property is taken over by the lender of money and the family will be deprived of the uses of the property. On the otherhand, the mortgage wishes to get the property insured because at the damange or destruction of the property he will lose his right to get the loan repayed. The insurance will provide adequate amount to the dependents at the early death of the property-owner to pay off the unpaid loans. Similarly, the mortgagee gets adequate amount at the destruction of the property.

4. Insurance eliminates dependency
At the death of the husband or father, the destruction of family need no elaboration. Similarly, at destruction of property and goods, the family would suffer a lot . It brings reduced standards of living and the suffering may go to any extent of begging from the relatives, neighbours or friends. The economic independence of the family is reduced or , sometimes, lost totally. What can be more pitiable condition than this that the wife and children are looking others more benevolent than the husband and father, in absense of protection against such dependency. The insurance is here to assist them and provides adequate amount at the time of sufferings.

5. Life insurance encourages saving
The elements of protection and investment are present only in case of life insurance. In property insurance, only protection element exists. In most of the life policies elements of saving predominates. These policies combine the programs of insurance and savings. The saving with insurance has certain extra advantages-i) systematic saving is possible because regular premiums are required to be compulsorily paid. The saving with a bank is voluntary and one can easily omit a month or two and then abandon the program entirely. ii) in insurance the deposited premium cannot be withdrawn easily before the expiry of the term of the policy. As contrast to this, the saving which can be withdrawn at any moment will finish within no time. iii) the insurance will pay the policy-money irrespective of the premium deposited while in case of bank-deposit, only the deposited amount along with the interest is paid. The insurance, thus, provides the wished amount of insurance and the bank provides only the deposited amount. iv) the compulsion or force to premium in insurance is so high that if the policy- holder fails to pay premiums within the days of grace, he subjects his policy to lapsation and may get back only a very nominal portion of the total premiums paid on the policy. For the preservation of the policy, he has to try his level best to pay the premium. After a certain period, it would be a part of necessary expenditure of the insured. In absense of such forceful compulsion elsewhere life insurance is the best media of saving.

6. life insurance provides profitable investment
Individuals unwilling or unable to handle their own funds have been pleased to find an outlet for their investment in life insurance policies. Endowment policies, multipurpose policies, deferred annuities are certain better form of investment. The elements of investment ie regular saving, capital formation, and return of the capital alongwith certain additional return are perfectly observed in life insurance. In india the insurance policies carry a special exemption from income-tax, wealth tax, gift tax and estate duty. An individual from his own capacity cannot invest regularly with enough of security and profitability. The life insurance fulfills all these requiremens with a lower cost. The beneficiary of the policy-holder can get a regular income from the life-insurer, if the insured amount is left with him.

7. life insurance fulfills the needs of a person
The needs of a person are divided into a) family needs,b) old-age needs,c) re-adjustment needs,d) special needs,e) the clean-up needs.

see more about importance see next post/page

MARINE INSURANCE

The origin of insurance is lost in antiquity. The earliest traces of insurance in the ancient world are found in the form of marine trade loans or carriers' contracts which included an element of insurance. Evidence is on record that arrangements embodying the idea of insurance were made in Babylonia and India at quite an early period. In Rigveda, the most sacred book of India, refrences were made to the concept 'Yogakshema' more or less akin to the well being and security of the people. The codes of Hummurabi and of Manu had recognised the advisability of provision for sharing the future losses. However, there is no evidence that insurance in its present form was practised prior to the twelfth century.

Marine Insurance
The marine insurance is the oldest form of insurance. Under Bottomry bond, the system of credit and the law of interest were well-developed and were based on a clear appreciation of the hazard involved and the means of safeguarding against it. If the ship was lost, the loan and interest were forfeited. The contract of insurance was made a part of the contract of carriage, and Manu shows that Indians had even anticipated the doctrine of average and contribution. Freight was fixed according to season and was expected to be reasonable in the case of marine transport which was then very much at the mercy of winds and elements. Travellers by sea and land were very much exposed to the risk of loosing their vessels and merchandise because the piracy on the open seas and highway robbery of caravans were very common. Besides there were several risks. Many times, it might have been captured by the king's enemies or robbed by pirates or got sunk in the deep waters. The risk to owners of such ships were enormous and , therefore, to safeguard them the marine traders devised a method of spreading over them the financial loss which could not be conveniently device was quite voluntary in the beginning, but now in modern it has been converted into modified shape of premium.
The marine policies of the present forms were sold in the beginning of fourteenth century by the Brugians. On the demand of the inhabitants of Burges, the Count of Flanders permitted in the year 1310, the established in this Town of a charter of Assurance, by means of which the merchants could insure their goods, exposed to the risks of the sea. The insurance development was not confined to the Lombards and to the Hansa merchants, it spread throughout Spain, Portugal, France, Holland and England. The marine form and lending prominence of Lombards merchants got a prominent section of the London City. They built homes there and took the name of Lombard Street. Later on, this street became famous in insurance history. The Lloyd's coffee-house gave an impetus to develop the marine insurance.
Travelers Property Casualty Insurance Company
Markel American Insurance Company
Zurich Insurance Company
Chubb Insurance Company
there are a lot of marine insurance companies in the world.

INTRODUCTION OF INSURANCE


Readers welcome to "insurance centre"

Insurance
This word indicates all about security. Security in all conditions like your life,
your home, your family,your business,your vehicle,your health and all others relating
to your needs of your life.

Insurance plays great role in our life.Insurance helps us when we are in trouble.
let me clear my visiters what the insurance is? in my "insurance centre" just see below-
-Frends now we are in 21st century, this means lots of people, lots of life, lots of wealth, lots of
vehicle, lots of home, lots of others i mean lots of everything ie lots of thieves, lots of kidnapper,
lots of robbers etc.Now calculate how much risky the life is friend??? In such conditions no any
security office no any guard office or any others will really help us in real trouble. They will only
try to recover us friend.So to make full claim insurance is the real hero for us. The great persons
in the world says insurance is only the real god in the earth because they makes us everything al
right as before.

We used to say "long live our king, our great person, and others like great player etc"
we say and they live is this true friend??? i don't think so. Nobody's life is guaranteed. Anybody
might die tomorrow. Who can fix their lives???. After your death what will happens to your family,
your wife, your children, your father-mother and sosososo. So better do insurance and make your
remain family lives secure/safe. Same conditions are applied to others like in vehicle, your home,
your health, your business and others.

Friends i am going to say one secret but popular thing ie movies' actor and actress used
to do insurance of their every part of their body so that they can maintain their body fresh healthy
for long time. Even players used to do insurance.

Do you know friends today why insurance companies are doing well and growing increasingly
these all are because of increase in population, their unlimited needs and needs of their securities.
I am afraid that no danger no insurance companies. if there was no danger there was no any insurance
and their policies. But friend this world is so crazzy. They don't let you live comfortably.

"Lastly my advice is to do insurance today and make your life safe in all conditions"

Thanks a lot for reading about insurance and it's policies. I feel great that you are going to do insurance.
I'll give you more information about insurance in further posts/pages.
Thanks again.

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