Dear Friends,
find few interesting information about insurance:-
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find few interesting information about insurance:-
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Brief details of Various Life & Non Life Insurance Policies
CLASSIFICATION OF INSURANCE BUSINESS
Insurance business are developed in to
1) Long term insurance i.e. Life Insurance
2) Short term insurance (one year) i.e. General or not life insurance business
LIFE INSURANCE
Special features of Life Insurance
· Long Term Contract – Policy for more than one year
· Covering sure event (death) even though happening is not sure - the sum payable at the time of occurrence is fixed, in general insurance claim amount payable is have to be calculated at the time of loss.
· Death due to natural cause (illness) is covered.
· Facility of premium in installment – premium can be paid in one single payment or annually , quarterly, or monthly.
· Use of mortality table – premium is based on mortality table developed over the years.
· Policies with option of profit / without profit – with profit policy will get bonus as a increase in sum insured, when company is making overall profit, without profit policy will not get any bonus.
· Benefit of premium paid as deduction under Income Tax – income tax deduction equivalent to premium amount is available to encourage the people to opt for life insurance.
· Concept of surrender / lapse / paid up policies
Surrender refers to the cancellation of policies on request of insured. Generally, surrender within first few years will not normally produce any amount to the insured. This is because of adjustment of expenses incurred for issuing the policy and coverage continued during the tenure.
Lapse policies referred to the situations where insured is discontinued to pay the premium and surrender value of the policy is very negligible.
An insured may opt for his life insurance policy to become paid up rather than take a surrender value. Here insured will stop paying the premium and whatever amount is paid up to that date will be converted into his sum assured and on a maturity of the policy he will get his revised reduced sum assured, with profit or otherwise as per his policy condition.
· Investment pattern for life insurance
The money generated through premium by insurers will be very huge sum and they invest it for better returns and profits. Insurance law usually provides for the limits with regards to investment of life funds with a view to safeguard the public money.
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04/06/2013
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