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EMPLOYEES STATE INSURANCE

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The Employees’ State
insurance Act came into a  force in 1948,
laying  the foundations  for a nationwide  comprehensive 
social insurance program  the
first of its kind in South East Asia. The scheme covers an integrated  system of social insurance wherein  the benefits include  cash payments 
in the event of sickness, maternity, employments  injury benefits and pension  to the dependants, and medical  benefits 
to the workers and their families 
. From January 1997, an employees 
is required  to contribute 4.75%
of the payable and the employee 1.75% of the receivable  as the Employee’s state insurance Scheme  (ESIS) 
contributions . Though offering  a
comprehensive  social security scheme to
all Indian citizens  from Kashmir to
Kanyakumari  may be a far-fetchedc one ,
the  Government  as the first major step, announced  the launch of a comprehensive social
security  scheme, under the Rajiv Gandhi
Shramik Kalyan Yojana to  employees
covered  under the ESIS. This scheme was
put  into 
operations  on April 1, 2005, .
The scheme offers invalidity arising  out
of the non-employees as a result of retrenchment  , closure or permanent members   of the
workers will be supported by the Employees 
state insurance Corporations (ESIC) 
without any burden on the employer or employee.  The scheme provides  an unemployment  dole of fifty per cent of the wage of the
unemployed  to receive medical care in
the dispensaries  and hospitals of the
ESIC. To be eligible  and to get benefits
under this scheme , the workers should have contributed for a period of five
years before the cessation of employments.  </div>
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ENGINEERING INSURANCE:  As the
indicates these are policies  designed to
cover various risks associated with engineering 
applications during various  
stages of productions  or
constructions  as the case may be. These
policies are process-specific. There are different types of plans to meet
specific  requirements.  The Contractors.’ All risks policy is one
that safeguard the interest of  contractors  and principals in respect of civil
engineering  projects. This is an
all-risk cover and cover can also be extended 
for third party and other liabilities. The sum insured under the policy
is equal to the estimated  final erected
value of the contract  on a full cost
basis. In the event of underestimation 
due to cost escalation, the insurer applies the doctrine of average to
the extent of under -insurance. Another variations  is the Erections all Risks Policy that is
concerned with the erection  of electrical
plants and installations  including
machinery,  equipments  and structures with little or negligible  civil works terms and conditions are similar
to the Contractors, “All Risk Policy” . Under the contractors’ All Risk
Policy”  and Erection All Risk Policy, </div>
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The option  is available for additionally
insuring the contractor’s plant and machinery. If the sum insured is within the
specified  percentage  of the main contract then the additional
cover will be conterminous  with the main
contract of insurance . Wherever the sum insured exceeds the specified
percentage, the  contract   could be an annual contract, for the
contractors  could be using the machinery
and equipments in connections   with
other works too. the additional cover indemnifies the contractors  against unforeseen  and sudden physical loss or damage to the
plant and machinery due to any of the specified 
causes like burglary theft, riots, malicious acts, terrorism  fire explosions, storms, accidental damages,
faulty  handling etc., </div>
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The various
locations where the plant and machinery will be stored should be   declared to the insurer.  The insurance are  also allowed to issue  the contingency policy on a “First Loss
Basis” where the contractors  find it
difficult  to provide  the value of individual Contractors’ Plant
and Machinery (CPM) particularly in the case of mega projects. The insurers are
allowed  to issue such covers under the
“File & Use’ procedure subject to adequate reinsurance support.  In the case of the collapse of the New Air Terminal
built in Paris at a cost of $ 925 million, as nearly 400 firms were
involved  in the constructions  of the terminal, it was expected  that the investigations  team headed by prof. Jean Berthier might find
it difficult  to pin down the  responsibility  to any one firm. It was opined that in the
event of any fault by a company, the claims have to be met by the police unique
chantier, an engineering  insurance
policy that covers  the liability  of any firm involved in the constructions of
the terminal for a period of ten years from the date of completions  . It is reported that the reinsurance is
shared by Swiss Re, Munich Re, General Re, and SCOR Group of France. </div>
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EMPLOYEES STATE INSURANCE

The Employees’ State insurance Act came into a force in 1948, laying the foundations for a nationwide comprehensive social insurance ...

GIVE LIFE INSURANCE ITS DUE IMPORTANT

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 For all
those who have financial dependents , life insurance is a must. Life  insurance acts as a tool for income  replacement. The idea is to not make the
surviving  family members suffer
financially  due to the absence of bread
earner.  Its do not enough to keep the
family maintain their standard  of living
life  insurance ensures  much beyond it. There are a financial
liabilities  towards, children which one
needs to meet., Life  insurance  makes sure such goals are met
systematically  and dreams and
aspirations of children are not 
compromised . In addition if there are housing  and car loans , life  insurance serves  it role in managing  them as well. In simple  terms, life 
insurance company, ensures your family 
doesn’t  suffer financially and
all your  goals  are met for a small price by paying a premium,
that your pay to ensure it.   THE
PRODUCT  RANGE:  Life 
insurance products help in channelizing 
your savings  systematically into
various assets for generating returns over the 
along term. As wealth  gets
disciplined  savings are goes a long way
in meeting  the long term financial  goals. 
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On one  end of the
spectrum are the pure the term  insurance
plans. They solely  cover the risk of the
dying. Nothing is paid  on maturity I.e.
on surviving  the policy will replace the
income  that will cease  to accrue. Then there are a  traditional 
insurance plans including 
endowments  and money back plans
which are a  ideally suited  for conservative  individuals 
looking  to bundle savings with
protections . On the far end is </div>
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the market linked investments  cum protections plan called until linked  insurance plan ideally suited for a   those looking for a bundling  and exposure 
to equities as asset  class for a
higher that inflation  kind of returns.
Besides protection   insurance,
products  with savings elements  helps in meeting one’s  long term goals such as kids  education 
marriage  or even retirements .
Market linked  insurance products
having  equity  exposure 
comes handy in this as equities are said to work best over long term as
against  other asset classes in
delivering  higher than inflation
adjusted  returns. Link your savings in
these unit linked  insurance plans to
long term goals. Be exposed  to
equities  till about three years  away from goals  and </div>
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then start shifting funds from equity  fund options to less volatile debt funds.
This helps in protecting  the gains
made. </div>
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LIFE STAGE BUYING: Buying  insurance is not a one time affair.  The 
insurance need changes as per life stage and one should provide for each
one of them. Reviewing  requirements  at every life stage or after 5 years  helps. For those who are single or have
recently  started career, the
immediate  need might not be there unless
there are a financially dependents 
parents or siblings ,. However even for them buying   insurance early in life helps in keeping the
premiums  low because of age and medical
9issues  connected  with higher ages. As one move up the life
stage., gets married and have children, the 
insurance need rises. Keeping and adequate coverage not only helps
family maintaining  the same standard of
living but also helps in achieving 
certain  life goals such as kid’s
education or marriage.  Since education
is the prime concern for most Indian parents, investing  in a child plan will ensure that the
education of your kid goes unhindered 
whether or not you are a around. Its is a  very likely 
that during this  period, one
takes a home loan and adds on the exiting 
financial liabilities. Getting 
not just the home loan insured 
but also any other form of loan such as a car or personal loan is a
must.  The value of the human life is
unlimited. Still most of us consider  it
enough  to keep a life cover of Rs. 2
lakh- Rs. 5 lakhs  or Rs 10 lakh . Will
it suffice ? Will such amount be enough to replace one’s  income be enough to replace one’s income  for the next several years? No wonder we at
most times are under-insured during  our
life time.  GET REAL VALUE OF YOUR LIFE:
Human life value (HLV) approach to calculating 
the  insurance requirements  takes into a account  four factors annual income, annual
expenses  years to retirements and
inflation adjusted cost of  expenses.
From these  factors a reasonable accurate
assessment of the value of your income can be made. First  deduct all your personal expenses  such as a food, clothes, travel,
entertainments  from your annual income
after deducting personal expenses  is
what your family consumes. Second see how many years of earning  are left your retirements  age minus your current age.  Project 
family expenses up  to
retirements. Add non-recurring expenses , like your children’s  higher 
education  or their marriage. The
shortfall is   <br />
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what you should 
insure for. Third calculate  the
present value of the shortfall allowing for a reasonable  rate of inflation . You may deduct
existing  life coverage and account  for any debt such as a  big ticket 
home loan to arrive  at a more
reasonable  HLV figure.  CONCLUSION: Link your life  insurance to your goals. Choose between
traditional and Ulips based on your requirements and understanding  of the products. Do not invest in any of term
unless you have a basic understanding of how these products the  work. Once</div>
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 bought  run them will till maturity and refrain  exiting 
earlier  as a it would  turn costly 
in surrendering </div>
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before the term ends. 
As a thumb rule, keep life coverage of at least ten times, of your  annual income. Above all, ensure you are a
not under insured  as that would be the
biggest mistake in your life. ...</div>
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GIVE LIFE INSURANCE ITS DUE IMPORTANT

For all those who have financial dependents , life insurance is a must. Life insurance acts as a tool for income replacement. The i...

LIFE INSURANCE TERM AND CONDITIONS

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Life insurance in its  nascent 
is known term insurance . The every very name implies  that the coverage is for a  limited 
and specific  time. A term
insurance  contract could be structured  for any period. Generally from the point  of view of underwriting  , the term 
varies  from five years  to twenty 
years. However Assured Life Time, a 
term insurance product of TATA -AIG is a 
available  fro a term of one year
and has certain attractive  options like
conversations  of the plan to a savings
plan and renewal  of one and five year
plans without  any medical test etc.,
Under a term insurance  contract, the sum
assured  becomes  payable only if death occurs  during the selected  term, and nothing  becomes 
payable once the term expires. Wherever 
the contract  envisages a  renewal of the contractor  for a stipulated  period after the expiry  of the original contract  such a policy is called Renewable  Term insurance policy. </div>
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Some term
insurance  contractors  offer a 
conversion  clause by which the
assured  can experience  an option of the to convert the term into
a  permanent  assurance plan without plan any further
medical  examinations  . LIC, Max New York Life Tata AIG are a few
examples,.  Until  recently term insurance contractors  were not 
popular in India.  The first
branded  term insurance plan Bima sandesh
with return of premium  provision  had a 
slow death for want to of proper positioning , . With the opening up of
the industry, the concept of the term assurance plans received a shot in the
term arm and many companies  like ICICI
prudential  Life, Birla Sun Life, and LIC
market such term assurance  plans as a assurances  with Return of premium (ROP).  With the opening  up to the industry to private players, the
concept of the ‘Term’ is getting promoted . Now private companies  alongside, LIC, market such plans , and
the  price war is hotting up in this
product class. For the first time among private insurers in the Indian market ,
Max NEW YORK LIFE came out the with a 
LEVEL  Term Plan with  yearly 
and other mode options  with the
term extending  to 20 year and 25 years.
This was  positioned as an
attractive  low-cost plan.  Another innovative term insurance plan was a
the KOTAK Preferred  Term PLAN (KPTP),
introduced  by Kotak mahindra  Old Mutual Life insurance company. His term
assurance with a  minimum sum
assured  of  Rs. 10 lakhs is available for men  in the group 
of 18-60  years , provided  they do not 
tobacco in any form. If some 
one  takes  to smoking 
the after the conclusion  of the
contract  the company may view  it as a violation  of the terms of contract  and decide 
to decline the death  claim, it if
is  established  that the death has resulted as result of the
policy holder taken to the tobacco smoking. </div>
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Bajaj Allianz  Term Care
offers  life insurance  cover at a low cost and provides  for returns 
of premiums on maturity. The premium  
returned  at a maturity amount the
to the sum assured  of the premium paid
until  maturity sans the extras, if any .
In the event of the death of the assured, the sum promised  is paid to the nominee of the legal heir. The
plan has built  in Accidental  death Benefits  and Accidental  permanent Total/ Partial Disability  Benefits subject to conditions . </div>
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This plan is
marketed  under economy, protect health
the and total compacts  with graded
benefits. ING Vysya markets  a term
insurance plan with a critical  illness rider
and HDFC standard  Life markets a loan
protections  cover. Life shield  a term 
insurance plan  offered by Aviva  life insurance , LIC’s  Jeevan Anmol, Shield, the term insurance
plan  of SBI Life Tata -AIG’s  Life Plus, ICICI Pru’s  Life Guard 
are some of the well known term insurance brands. A number of the
variations  are offered  under these plans.  Though 
a term insurance  plan provides
very high protections at a minimum cost, it should be noted that it is only
temporary protection  and cannot  offer the type of the security  that a 
permanent  insurance cover can. It
should  also be noted  that if they 
a person aged 30 , considered  the
cost advantage  and takes only a term Assurance for a 
period  of 30 years and if he/she
survives the term on reaching  the
elderly  age of 60, he/she is left  high 
and dry without any insurance proceeds 
to fall back on. Even  in the US,
where the dictum buy term and invest the rest was once popular , public outlook
is changing in preference to comprehensive plans.</div>
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LIFE INSURANCE TERM AND CONDITIONS

Life insurance in its nascent is known term insurance . The every very name implies that the coverage is for a limited and specific ...

RURAL LIFE INSURANCE AND PRIVATE SECTOR INITIATIVES

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Among  the private sector  insurers, who started  their activities during  2000-2001, aviva life insurance  . Co had launched  an exclusive 
plan for  rural  areas called Gram Suraksha. The test marketing  results of the Plan in Andhra  Pradesh 
were reportedly encouraging  and
the company  hopes to market the plan
through institutions. The law priced policy offers life cover and money back
benefits . For broad basing  its rural
portfolio , Aviva life  had opened  offices 
at Faridkot, Nagpur, Nashik and Udaipur, in September 2003, Aviva had
also launched  customized  products 
called  Amar Suraksha  and Jana Suraksha . </div>
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The term former  is a  term insurance cover the with return of the
premium provision  on  survival 
of the selected  term., The latter
is a  fixed term policy available  for terms 
of five years  and ten years  respectively 
for the sums assured of Rs. 25,000 or Rs. 50,000  as the case may be. Aviva is confident  of utilized 
the extensive rural network of its Indian partner , Dabur.  This was 
followed by the launch of the Sankat 
harn Policy by IFFCO-tokio , General insurance  Company 
for farmers, Gramin Bima Yojana, a plan of Kotak mahindra  Old Mutual insurance co.  Is a plan designed to suit  the needs 
of the rural populace. This single 
premium endowment  plan provides  for payments 
on death or maturity whichever  is
earlier  . The plan  has a fixed term of 15 years . </div>
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The policy can
be surrendered by at any times  and the
surrender at any the time and the surrender value  varies 
from 90% tp 230% upon the period by for which  the policy has remained  in the books of the insurer. ICICI
Prudential  had also launched  different 
types of the  policies like
ICICI  Pru Mitra an endowment  type of the plan and ICICI plus Pru
Suraksha  a regular premium plan to meet
the varying  needs of the rural populace.
HDFC Standard  Life markets  certain 
specialized life insurance products for the rural market.
Development  insurance plan., A group
insurance product is being  offered by
the HDFC Standard life to the rural markets 
through NGO;s  and  Bima Bachat Yojana, is another  product meany by the  rural consumption .</div>
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 The Birla  Sun Life , Bimla Kavach Yojana is a single
premium insurance policy specially designed 
for the rural under privileged. The private insurance companies until
the end of the fiscal 2002-2003 could not be make by any perceptible
penetration  into the rural areas and as
the end of the fiscal  200-03, the
combined  rural life insurance
coverage  by LIC  and private 
players was around 27% leaving  
behind a substantial 
populations  to be covered.  Both for the public sector and  the private insurance companies, distributing
products   in rural areas poses certain
problems  . As a  agricultural 
income is presently  tax-free in
India, in the rural areas tax sops  offer
no  attractions  and , as a 
such the marketing  is more   individual need -based. Many of the agents
for advisors, do not find it profitable 
to visit the rural areas or 
distributing  limited  products, .</div>
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 To overcome this situations,
companies  are adopting  new strategies, . Some  companies resort to mass compaigns  by addressing the villagers  with the help of the local village head or
the Sarpanch  . Alternatively, some of
the companies  tie up  with banks 
having  wide  rural networks for distributing  insurance products, through  the Bancassurance  route. Some companies  enter into tie-up with NGO’s and social
organizations  facilities. Agencies  to offer product  in the rural 
areas. Some of the companies are also drawing are also drawing  on the concept of  Rural Career Agents or Advisors, which has
been pioneered by LIC, in spite of difficulties, unlike in the past
fiscals,  at the end of the financial  year 2003-04, all life insurers  had completed 
their rural and social sector obligations, In the connection  a suggestions,  of Apparao 
Machiraju  merits  examinations.....</div>
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RURAL LIFE INSURANCE AND PRIVATE SECTOR INITIATIVES

Among the private sector insurers, who started their activities during 2000-2001, aviva life insurance . Co had launched an exclusiv...

SETTLEMENTS OF CLAIMS UNDER MOTOR INSURANCE

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 The claims arise under motos insurance are divided  into two classes i.e. claim for own damages  and claims for third liability.  (A) CLAIMS FOR OWN DAMAGES: Own Damages arise which damage to the vehicle  is caused by the insured. These damaged  are generally caused by collision or over running of the vehicle. The settlement of claims for own damage is done in three phases, namely preliminary scrutiny  assessment of loss and settlement.   (a) PRELIMINARY SCRUTINY:  Immediately on occurrences of any accident or loss of or  a damage to the vehicle, the  insured has to serve a notice of a loss of the insurer. On receiving  the notice, the insurer will check his records to find out whether policy is in force or discontinued ..</div>
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Later, the loss is entered in claims  register and a claims form is sent to the insured to be filled up by him and to be returned  to the insurer. The insured is asked to give all  relevant   particulars in the claim form such as a date and time of accident cause of accident extent of damage to the vehicle  etc. The insured is also required to submit a detailed  estimate of repairs from any repairer of his choice. The insurer generally accepts the estimates. But at times he  asks for another estimate , Insurer does with this when it doubts the competence  moral hazard or business integrity of repairer first chosen.   (b) ASSESSMENT: The insurer employs independent  automobile surveyors  to ascertain the cause of the accident and extent of loss sustained by the insured.</div>
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 The surveyors  are supplied a copy of a the policy , the claim form and repairer’s  estimate. They inspect the damage vehicle, discuss the cost of the repair or replacement with repairer and submit their survey report. In case of minor damage claims independent   surveyors is not appointed. The officials  of insurance company or its engineer inspect  and finalise the claim  report.  ( C ) SETTLEMENT: The surveyors  report is taken as a basis for settlements of claims. The report is examined  thoroughly  and settlements is made according to the recommendations  in the report. The usual practice is to authorize repairer. The repair receives a later from the insurer. The repairer will be given payment after completion  of repairs. The insured has go to give a satisfactions  note or voucher that he is hundred  percent satisfied with the repairs. In case the cost of repair paid by the insured, the latter can recover the amount from the insurer. For reimbursement of cost of the repair the insured has to produce  the letter receive from the repairer  with the insurer as an evidence for payment of cost of repair. Finally the insurer will pay the claim for cost of repair.  </div>
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(B)  CLAIMS  FOR THIRD PARTY LIABILITY: The third party liability arises  when a motor vehicle hurts a third party so as to cause damage to his property or his death or a personal  injury  to him. For settlement claims for third party liability the following procedure is generally adopted:  (1) ENTRY OF NOTICE:  As soon as the notice of claim is received  from any: the insured the third party, or the Motor Accidents Claims Tribunal (MACT)  the same will be entered in Claims Register. Date of intimation, claim number , Policy number data of accident. Vehicle number . MACT  number . Name of Insured, Driver and claimant, amount claimed etc are entered in the Claim Register. Separate sections are maintained in the register for fatal claims and bodily injury  claims</div>
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SETTLEMENTS OF CLAIMS UNDER MOTOR INSURANCE

The claims arise under motos insurance are divided into two classes i.e. claim for own damages and claims for third liability. (A) CLA...

HISTORY OF MOTOR INSURANCE

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 Motor insurance was
first launched  in U. K.. The first car
was manufactured  in 1984and the first
motor insurance  policy was issued  in 1985. It covered liabilities  to third party. In 1889, accidental damage to
car in 1901 burglary and
fire were added. Thus the progress made is found is in comprehensive policy of
today. In 1903, the car and General Insurance Corporation Ltd. Was started and
many companies  were started later. After
World war, number  of card and car
accidents increased. The victims of the car accidents  were not given any compensations. So the
third party insurance was made mandatory (The Road Traffic Act 1930, 1934, and
1969)  (In Motor Vehicles)  Act was enacted  in 1939. The act was the same as that of U.
K. The only differences 
is that in U. K. tariff is withdrawn, but India’s tariff governs
the  insurance.<br />
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FUNDAMENTAL PRINCIPALS OF MOTOR INSURANCE</div>
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The basic principals 
applicable to motor  insurance are
the same as they are  in property and liability  insurance. But the applications of these
principles  to automobile  insurance is accepted  as a specialised  problem requiring a special contract. However
let us recall the principles below in brief: (1) Utmost good faith: Motor  insurance contracts are contracts of utmost
good faith . The proposer is liable to disclose all the material facts
relating  to the motor vehicle  to insurer. For this purpose the proposer is
a given a proposal  from and he is asked
to give answers for all the questions asked in it. The answers  given by the proposer  becomes warranties or promises. So the
answers  must be true to the language and
must  be correct. Any incorrect answer 
on any matter will make the contract viodable. Some examples  of material facts are: the type of vehicle,
the geographical  area of use, the
physical health  of driver the driving
history, traffic convictions and post loss experience etc. Many of these
provisions are now regulated by motor vehicle Act 1939 </div>
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. (2)
INSURABLE INTEREST: It refers to legal right to insure. The essentials of
insurable interest are: (a) Existence of motor vehicle exposed   to damage or liability : (b) such motor
vehicle must be the subject matter of insurance: and ( C ) the insured must be
in such a position that he shall suffer by loss or damage or benefit by the
safety of the motor vehicle. Generally the following parties are expected to
have a</div>
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n insurable 
interest.  (a)  INSURED: As a owner of vehicle the insured
suffers a loss if his vehicle is damaged or from a legal liability to
third  party who suffers a loss for his
negligence. (B) OTHER THAN INSURED:  The
driver of the vehicle may create liability for insured. In effect, the insured
becomes the agent for the drivers and insured indemnifies him.  ( C ) FINANCIER: In hire purchase agreement,
the financier’s interest is insurable. In case the vehicle  is lost 
or damaged, the financier can get compensation. <br />
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(d) MOTOR TRADER: The garage proprietors as bailees have
insurable interest for customer’s loss or damage.  (3) INDEMNITY: The objects of this principle
is to place the insured after a loss in the same financial position as far as
possible, as he occupied immediately 
before the loss. The effect of this principle is to prevent the insured
from making a profit out of his loss or gaining any benefits or advantage.
Accordingly  to this principle, the
insurer is liable to pay the actual value of loss or sum insured whichever is
less in case of total loss to insured. If old parts are replaced by new a
suitable depreciation is charged on new parts. Insurer may repair or replace or
pay cash as it likes. Liability to third party is limited to policy sum Legal costs are also indemnified. </div>
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(4) SUBROGATION AND CONTRIBUTION: Subrogation is transfer of rights and remedies of the insured to the insurer who has
indemnified the insured  in respect of
the loss. It arises only when the third party is responsible for damage.
Insurer may exercise the insured’s right to recover damages. Generally they the
right arises after payment of damage. Contributions  refers to sharing of damage between
co-insurers. It is done in the proportion 
the insurer’s share bears to total sum of all insurers</div>
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(5) PROXIMATE CAUSE: The insurers are liable to pay  compensations only if loss is caused  by a peril most proximate or the nearest to damage and if it is insured
against. It is applicable to third party claims also.</div>
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HISTORY OF MOTOR INSURANCE

Motor insurance was first launched in U. K.. The first car was manufactured in 1984and the first motor insurance policy was issued in...

MISCELLANEOUS INSURANCE

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MISCELLANEOUS INSURANCE</div>
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Introduction : 
Insurance not falling under fire insurance and marine  insurance is considered as miscellaneous  insurance as per the insurance. Act 1938. The
four public sector general insurance companies and some private general insurance
companies have brought to light a number of miscellaneous insurance policies is
cover a variety of other risks. The most important  forms of miscellaneous insurance are: Motor insurance, Legal liability insurance, Business
insurance, Hospitalisation insurance, Social sector insurance, Engineering
insurance,  Rural insurance,  and other insurance. Let us discuss all
these  insurances, one by one in the
pages to come</div>
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. 1. MOTOR INSURANCE : The owner of a motor vehicle  is exposed to various types of risks. These
risks fall into two groups. First those of damage to , or loss or destruction
of the motor  vehicle  itself and second, that of being called upon
to pay damages for injuries which may be done to others through  the use, ownerships  or maintenance of the motor vehicle. The
first</div>
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or risk  may further
be classified as follows: </div>
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(1) Destruction by 
fire, internal or external in origin, </div>
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(2) Theft, </div>
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(3) Injury through collision with some other object moving
or fixed or through upset.</div>
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 (4) Other damages to motor  vehicles as by breakage of glass, damage in
flood, or while being transported. The second type of risk  is the liability
of the insured to third parties arising out of a accidents caused by the use of
a motor vehicle on the road. The liability may be for death  or bodily injury or for damages to property.
The risk also vary accordingly  to the
class of vehicle. E. g. in a passenger automobile. the liability may be for
death  of or injury  to
passengers  or in a common carrier, the
liability may be loss of or damage to the property carried. In order to
safeguard  the owner of a motor vehicle
from the above mentioned risks a special insurance,</div>
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conceived known as marine insurance</span></div>

MISCELLANEOUS INSURANCE

MISCELLANEOUS INSURANCE Introduction : Insurance not falling under fire insurance and marine insurance is considered as miscellaneous ...

TYPES OF GROUP INSURANCE POLICIES

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The LIC of India has designed some group insurance
policies  for the benefit of working
class. Such  policies are described  briefly 
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  (1) Group (Term) Insurance
Scheme: It provide  life insurance
protection  to group of people. It is
offered  under One Year Renewable Group
term Assurance (OYRGTA) and  the
scheme’s  is renewed  every year after taking in to a account the
changes  in the size of group. The
following are the main features of this scheme. 
(a)  Master policy: A single
master policy is issued covering  all the
members of the scheme. The scheme is administered by the Employer Associations,
Societies, etc. called Nodal agencies, </div>
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(b) Premium : Premium rates are reviewed
on the basis  of claim experienced under
the individual scheme. ( C ) Eligibility : For all Non-employer employee  group scheme, the basic insurability
condition is that the member should be 
in good health on the date of entry. For the GI scheme of employer-
employee groups the  insurability   condition is that the member should not be
absent on  groups of sickness on the
entry date.  ( D)  Restrictions: The restriction under this
scheme relate to minium and maximum age limit for eligibility of cover (18to
60), participation of minimum percentage (75%) 
of eligibility  members  of the  groups at inception  and compulsory participation of all new members.  (E) 
Benefits: As the name term insurance indicates the amount cover is
payable in the event of death of the member. Nothing is payable on survival.
The cover amount  is either uniform or
graded. Uniform cover means that every member 
of the  groups is insured for the
same amount. The cover is decided  on the
basis of average size of the  group and
occupation or activity  which  group is engaged in. Graded cover  us usually granted to employer /
employee  groups because of general level
of health care and life style of the member being  satisfactory. For graded cover,  group can be divided  in to who three or four levels such as: </div>
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GROUP
INSURANCE SCHEME IN LIEU OF EDLI (EMPLOYEE’S 
DEPOSIT LINKED INSURANCE) : All employers to whom the Employee’s . Provident
fund and Mis. provision Act 1952 applies 
have a statutory liability to provide life insurance benefit to all
their  employees by subscribing  to Employees Deposit linked Insurance
(EDLI)  1976 i.e, Rs. 0.60 per Rs. 100
wage  bill of each employee. Under
EDLI  scheme, in the event of death  balance in PF account  of the deceased Rs. 60, 000, whichever is
lower . The Employees P.F and Mis . Provision Act also provides</div>
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that if  any scheme of
insurance gives more benefits than the EDLI the employer  is entitled to switch over to that scheme after obtaining  the approval of the  Central provident Fund Commissioner.  LIC’s 
GroupInsurance  Scheme in lieu of
EDLI has been accepted  as a better
alternative for EDLI. Under LIC’s  group
insurance Scheme. each employee is covered for a sum assured  of more than Rs. 60, 000 depending upon the current
salary and services put in from the very first 
day, irrespective  of the actual
balance in the provident Fun. 
ELIGIBILITY:  For LIC’  Group insurance  Scheme in lieu of EDLI  the insurability  condition is that he should be a member  of the Provident Fund’s Scheme  of the employer.  ACCIDENT BENEFIT: Double  accident benefit can be allowed to the extent
of the sum assured  for an extra premium
@ Rs. 0.75 per thousand. Benefits to Employer: (a) Premium under LIC’s Group
insurance scheme is usually less than the total contribution to provident
fund  authorities. (b) Settlement of
claim is quicker  ( C ) Premium paid is
treated as business expense  for income
tax purpose.  </div>
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 GROUP SAVINGS LINKED
INSURANCE (GSLI) scheme: The GSLI scheme offers insurance cover together with a
saving element. The GSLI scheme this scheme , is deducted from the monthly
salary of the member. The scheme is applied in Govt. Bodiespublic sector corporations and reputed  private companies who  keep accurate records of their employees. A portion of the contribution of the employees is
utilised  as premium to cover  term assurances  for a fixed sum and the balance is treated as
savings which are accumulated  at an
attractive rate. At present, the rate  is
10%  p.a, Member exit the scheme on
retirement or earlier by death or resignation. BENEFITS: (a) On death while in
service: Amount of insurance cover and accumulated  savings up to 
the date of death. (b)</div>
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 On retirement /
resignation: Accumulated  savings up to
the date of exit. TAX BENEFIT: (a) 
Contribution Full are treated as insurance premium and enjoy the
benefits under section 80C. (b)  Savings
accumulations received are tax free.</div>
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TYPES OF GROUP INSURANCE POLICIES

The LIC of India has designed some group insurance policies for the benefit of working class. Such policies are described briefl...

GROUP INSURANCE POLICIES

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Group insurance policies 
are certain plans of insurance which are offered to group of persons.
The group may be:<br />
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(a) Employer- employee 
group, (b) Association  of
professional, doctors, etc., ( C ) Members of Co-operative Banks / Credit societies. (d)  Association of weaker sections such as
Rickshaw pullers, Railway porters etc., (e) Member  of housing Societies.  (f) Borrowers of housing  loan from public sector undertakings.  (g) Borrowers of Bank  Co-operative Societies or housing societies.
Under group insurance a master policy  is
issued as evidence of contract between the insurance company and another legal
entity which may be an employer, trustee, and an association.<br />
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The master policy
defines the group of lives to be covered 
benefit if confers, the amount of contribution  to be paid and other condition and
privileges  of the participating  group member. Group insurance is a group
selection process and not a selection of individual life. It is recognised that
every group  will contain some proportion
of substandard lives but group under writing  assumes that
the insurer is able to reasonably  assess
the overall risk from the general nature 
of the group. The group  is
supposed to be homogeneous and contains 
sufficient  numbers so that the
number of claims to be  homogeneous and
contain  sufficient numbers so that the
number of  claims by death can be
reasonably  estimated on the basis of the
average. The amount of cover is determined on the basic of a formulas and is not
decided by individual  forming the group.
Insurance on the lives of all members up to a limit called ‘Free cover
limit’  is granted  on the basis of simple rules of  insurability ‘. ‘Simple rules of
insurability   means not absent from duty
on group of sickness  on the date of
effecting insurance. Free cover limit does not mean free insurance premium. It
is free to the extent that no evidence of health is called for .  As a result of ,ass
administration and simple underwriting 
practice, group insurance becomes 
a low cost insurance cover for a group. However the premium rates are
adjusted   on the basic of experiences.
This is called. Experiences Rating . For medium and big sized group. sharing of
profits on the basis of years after taking into amount feature. If surplus is
generated over a period of years after 
taking into account the premium collected and the benefit conferred the
rate of premium can be reduced in the future years. If on the other hand, it results in continuous  is rated up.<br />
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Difference between Group
Insurance and individual insurance  Group
insurance differs from individual 
insurance on the following counts.</div>

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 (1) Cover: A group of person  is covered under the Group insurance. A
person’s life covered in individual insurance. (2) Contract: The Group
insurance is contract between the insurer and another legal entity, which may
be an employer, trustee and an association. The individual insurance is a
contract between the insured and the insurer.</div>
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(3) Medical Examination : No medical examination is required
for Group insurance. In  Individual  insurance, medical examination is necessary
in most of the cases. (4) Policy: A master policy is issued   for Group insurance as against an individual
policy  in individual insurance. (5) Sum
Assured : A fixed sum assured is paid for every claim under Group insurance.
The sum assured depends  upon the premium
paying capacityof the assured in individual insurance.</div>
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  (6) Premium: The premium under the Group
insurance is paid by the employer or employee or by both. The premium under
individual insurance is paid either by the assured or by the insuring
party.  (7) Protection: The group
insurance  is a social welfare scheme.
The individual insurance is a provision 
for old age and for the family. 
(8). Change of Assured: The individual is changed under the Group
insurance in case of retirement or death. No such change is possible in
individual insurance.<br />
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GROUP INSURANCE POLICIES

Group insurance policies are certain plans of insurance which are offered to group of persons. The group may be: (a) Employer- empl...

LIFE INSURANCE PRODUCTS OR POLICIES

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As mentioned
earlier  in the  life insurance 
industry, apart from LIC India Several private companies are also
involved  in selling  life policies to general public living in
different corners of our country. The policies of private players have already
been given in the previous chapter. The policies of LIC of India have great
have been grouped under the following nine major  heads.<br />
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1) Whole life policies. 2)  Endowment policies  3) Children’s policies 4)  Joint life policy  5) women’s policy 6) Term policies  7) Special policies  8) Group insurance policies  9) Pension policies.   </div>
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(1) whole life policies:  </div>
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The risk is covered for the entire of the policy holder which
is why they are known as whole life policies. They policy amount and the bonus
are payable only to the nominee or the beneficiary upon the death of the policy
holder. The policy holder is not entitled to any money during his or her own
life time i.e., there is no survival benefit. This represents a  serious drawback in the case of whole life
policies for they go on covering a policy holder’s life even after his life has no
further economic  value for others. One
the other hand   a policy holder would
probably require  the money for himself  and his spouse during  retired life but this would not be possible
since the sum assured is payable  only
when the   policy holder dies. In his
sense whole life  policy  are fairly 
rigid and suitable  only in a few
very specific cases. The important  whole
life  policies offered by LIC of India
are as follows:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjErOpNzBJWzI4K9qZYznKQxiXe1URuxe4piwSdZtpXlNRWyd_3VXWJrUeXZ2rnm2SlgF5JMhUfnS-r9hgFuT4pgIqEtMkpGQr2OJcDVbO6he-de3tuHd6rOj-Zcr4xk3ALZi_c_Rk79-o/s1600/insurance+life.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjErOpNzBJWzI4K9qZYznKQxiXe1URuxe4piwSdZtpXlNRWyd_3VXWJrUeXZ2rnm2SlgF5JMhUfnS-r9hgFuT4pgIqEtMkpGQr2OJcDVbO6he-de3tuHd6rOj-Zcr4xk3ALZi_c_Rk79-o/s1600/insurance+life.png" width="400" /></a></div>
<br /></div>
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 1)  Single 
premium whole life plan No.8: Under this 
policy  the total  amount of premium payable is paid in one
lumpsum by the assured. The time element is the predominating feature and
protection element  is substantially less
than the face value of the  policy .
The  policy  is not so 
popular but is purchased for investment 
purpose. It suits those persons who get windfall income like lotteries
etc. and who can afford such single payment. The minimum sum assured is Rs.
20,000 and there is no limit  maximum sum
assured.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxrblUsg0tV6sPaSmXbJKJqO2xT9LfQ2jGr-JmaTeD00sV8DmDRTYqdJsKtDdNsS-zbH_jPmS8oCDRyJrUdsd1jZtQdsdVZ-QfZ14jj9RT195xTEBV91mLQWBwICO0J654EmobyXaPmMQ/s1600/life.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="312" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxrblUsg0tV6sPaSmXbJKJqO2xT9LfQ2jGr-JmaTeD00sV8DmDRTYqdJsKtDdNsS-zbH_jPmS8oCDRyJrUdsd1jZtQdsdVZ-QfZ14jj9RT195xTEBV91mLQWBwICO0J654EmobyXaPmMQ/s1600/life.png" width="400" /></a></div>
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(2) Convertible whole life plan No-27: 
This  policy  is suitable to young man who is on the thresh
hold  of his career and has prospects of
increase in income after some times. The object of  this is to provide maximum protection at
minimum cost. It is a whole life without profit plan, premiums payable up to
age of 70 yearsof the assured. The
premium charged is that of whole life without profits  and therefore sufficiently low. This risk is
however covered for the full sum assured. After 5 years, the life assured can
convert this  policy  into an endowment with or without profits
choosing that term without having to go on in for a medical examination In case
the conversion option is not exercised at the end of 5 years the  policy continues as a whole life plan
without  profits with the premium
payments ceasing at the age of 70. The minimum sum assured is Rs. 20 000, and
the maximum age at the entry is 45 years. 
3) Limited payment whole life plan 
No-5: In this  policy the life
assured required to pay premium for a fixed period from 5 to 55 years. The life
assured shall have</div>
</div>

LIFE INSURANCE PRODUCTS OR POLICIES

As mentioned earlier in the life insurance industry, apart from LIC India Several private companies are also involved in selling life...

SCIENTIFIC PRINCIPLES OF LIFE INSURANCE

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Insurance  have been able to keep their promise
because  life insurance  is based on sound scientific  principles. These include<br />
<br />
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 1)  Shared risk: Members of our  earliest societies understood the
benefits  of pooling  their resources talent and also risk .
Whether  hunting for food or
defending  against common enemies  people found that sharing the risk among the
group minimized the risk to the individual. This is how the workers  guilds of the middle ages attempted  to protect families of members  against another common enemy: financial
hardship caused by death. Members  would
contribute  small amounts  each years  into a common widows and orphans fund. Though
the system was flawed it did provide basic protection for families  of members who died during the year. This
idea was still used as late as the Nineteenth Century  in this country by immigrant groups: it later
became the basis for the hundreds of fraternal 
life insurance  companies still
flourishing  today as well as  for association group insurance plan
including  those offered by the American
Academy of family physicians. </div>
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2) The La
of the large numbers: The principles of shared risk only works when the law of
large numbers is also applied, Under this scientific  principles the larger the group, the less
impact the death of one member has on the group as a whole. A group with just
ten, a hundred even a thousands members would not works. The base would  be too fragile  to susceptible 
to mortality blips due to situations and events that lead to
unexpected  deaths such as a  flu epidemic 
or earthquake that look of thousands of lives in a  certain geography  location. This is one reason groups and
individual today transfer the risk to insurance companies in effect forming new
groups consisting of  hundreds of
thousands  very often millions of
members.<br />
<br />
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3)  Predictable Mortality: A third principle
of  life insurance   is predictable mortality. It is not possible
to tell when a given individual will die. but du to more than a century of
tracking and recording data about health life style and mortality trends,
insures can projects life expectancies. This data  is recorded in mortality tables. A mortality
table is a chart summarizing the life span of a large number of people.
Specifically it projects (a) the number of death that will occur per 1,000
individual  at a given age and  (b) the life expectancy of an individual at
any age. The 1980 commissioner’s standard ordinary mortality table 1980 (SO) is
the official mortality table in use the by all insurances today, It charts a
representative sample of 10 million lives and 
follows them to age 100 when for insurance purpose the last person is
presumed to have died.  Once  the insurance company  can reasonably  predict how many people of a given age will
die in a given year, it can project mortality experience. Subsequently the
insurer can then project costs and premium 
rates. For instances  as life
expectancy  has climbed dramatically in this century the cost of  life insurance  has decreased.<br />
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4) 
Invested Assets: When the insurance company receives premium, that money
is not just put into  a vault. It is
invested. It may be years before a claim is made against the police. So, the
impact of investment experience can be significant. The projected return is
factored into premium and other costs. At the same time a percentage of assets
is set aside in company  reserves to
reduce the impact of unexpected events.  </div>
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 5) Fair and accurate risk selection: A 
life insurance  contract is an
aleatory contract. It is  based on the
possibility  of a chance occurrence and
in all likelihood, one side will benefit more than the other. However  for 
life insurance  to work, the
insurer needs to recover as many variables as possible. This brings  up to the final principle  of insurance, which is fair and accurate risk
assessment. Especially  with the
individual insurance policies, coverage is issued based on the assumption of
reasonable risk. This means insuring people who are  generally in good  health at the time of application. This
is also why medical exams  and blood
samples are sometimes required. Once 
insured policy owners are protected if they become ill. That is the
reasonable risk the company  assumes that
a certain percentage of insured will die prematurely. However  were the company to issue policies on
seriously ill application   life
insurance  would becomes
prohibitively  expensive.</div>
</div>

SCIENTIFIC PRINCIPLES OF LIFE INSURANCE

Insurance have been able to keep their promise because life insurance is based on sound scientific principles. These include 1)...

LIFE INSURANCE Vs NON- LIFE INSURANCE

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 The following are the differences between  life insurance  and other forms  insurance 
such as a  fire marine  and miscellaneous insurance.  1) Happening of event: The event insured
against in  life insurance  is a certain event, the only uncertainty
being the time when the event will occur. But in case of fire and marine   insurance  
the events insured against may or may not take place at all or may tale
place wholly or partly. Thus in  life
insurance , every policy will become a claim sooner or  later but it is not so in other insurances.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXD2m16jnk5f4YyGowHN5V5BwjXIn51GJPCK8I_AEK1wTgXVLnu2cbAcpEhusWmgcJGc6a6PNiZ3nZVEQfhQMZMkZjbt5FoPiuyz2mosJJz6BPL1WUvlK1GDaTKhq-cptaVHUqZJ1YCFk/s1600/Economic-Downturn.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXD2m16jnk5f4YyGowHN5V5BwjXIn51GJPCK8I_AEK1wTgXVLnu2cbAcpEhusWmgcJGc6a6PNiZ3nZVEQfhQMZMkZjbt5FoPiuyz2mosJJz6BPL1WUvlK1GDaTKhq-cptaVHUqZJ1YCFk/s1600/Economic-Downturn.png" width="400" /></a></div>
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 2)  Partial Loss:  Life insurance  is a contract 
to pay an absolute amount on the maturity of the policy and there is no
possibility of partial losses but the other insurance are indemnity contracts
where only the actual  amount of loss
will be payable irrespective of the assured sum.  3) Risk assessment: Risk classification is
generally more simple in  life
insurance  chan in the  others forms of insurance. Here all the lives
are divided into three groups: Standard sub-standard and  uninsurable. But of property insurance.  the classification is more complex e.g. in
marine insurance. the risk may be divided according to the type of vessel.
voyage, season  etc. So is the case of
fire and other insurance.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6vE1nJr1nLW-rAkgOgKbJFEyyXUmim3_HQYFs61XFp4JsrbYn3zqUjXBxIOeVn2h023VGcD7uYLR-iEZ5NWpPt6QuhVpVHygGbVSEdLdPukHCy4WOCvdy21mH4jn5oqqqrcL-_HqHrw4/s1600/bigstock-thinking-business.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="381" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6vE1nJr1nLW-rAkgOgKbJFEyyXUmim3_HQYFs61XFp4JsrbYn3zqUjXBxIOeVn2h023VGcD7uYLR-iEZ5NWpPt6QuhVpVHygGbVSEdLdPukHCy4WOCvdy21mH4jn5oqqqrcL-_HqHrw4/s1600/bigstock-thinking-business.png" width="400" /></a></div>
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 4)  Period: 
In most forms of insurance the policy is taken for one years of even for
a shorter period  but in life contracts
the insurance is taken for very long period.  </div>
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5) Premium: In  life
insurance  the premium are charged
generally on level premium plan which means that the premium charged in the
initial years of the policy are higher than the actual cost of insurance but in
fire and marine insurance contract , the premiums are just sufficient to cover
the actual cost of insurance  it contains
both the investments and protection elements but in  the fire or marine contracts there
exists  the protection  element only.</div>
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 6)  Insurable Interest: In  life insurance  the insured 
must have the insurable interest when the policy is taken. but in marine
insurance  he must  have it when the loss aries. In  life insurance  the insurable interest must be present at
both the times, when the policy is taken and when it becomes a claim. </div>
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<br />
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  7) 
Higher hazard: In  life
insurance   the hazard increases from
year to year. This happens in fire and marine insurances also but there the
subject  matter may be kept in good
condition  by  repair or the 
replacement or worst  parts: but
in  life insurance  the chances of death go on increasing with
increased age whatever precautions  may
be taken by one about one’s health. In spite of the higher hazard  from year to year, the same premium rate is
charged in life contracts.  </div>
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8) Procedure:
Medical examination  is required 
before a  life insurance  is granted whereas survey is made for before
a property is insured. </div>
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 9) Amount: Life
insurance  can be taken for any amount
depending  upon the premium paying
capacity of the insured. But  in other
insurances policies can be taken up to the value of the property </div>
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 10) Transfer: A  life police 
can be  transferred either by
assignment or by nomination. But in other insurance the financial  interest can be transferred only by
assignment with the prior permission  of
the insurer.  </div>
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11)  Surrender: A life policy 
can be surrender  by the insured
before its maturity. But in other insurances, it cannot be done. </div>
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12)  Claim: 
The claim money in  life
insurance  is an agreed amount as the
insured sum which is fixed in advance by the insurer as well as the insured.
Claim money in other insurances  arises
only in  case of <o:p></o:p></div>
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loss due to risk.<b><o:p></o:p></b></div>
</div>

LIFE INSURANCE Vs NON- LIFE INSURANCE

The following are the differences between life insurance and other forms insurance such as a fire marine and miscellaneous insuranc...

ADVANTAGES OF LIFE INSURANCE

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The advantage of life
insurance over other types of savings instrument available  in the market are as follows<br />
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<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCWiazXAylb1TqDF75wPqE0zAyHaG699RE7TnQdZLyTCGLXZXNUSU19ZngsnYaDg_MT_QVUoWbXvJwh7-MuMj5aTm_u2859Rolfw_pq6vkJuQa2K-bIw6JDZ8_FGZ38PE9DstBsh9ogcc/s1600/business-women.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCWiazXAylb1TqDF75wPqE0zAyHaG699RE7TnQdZLyTCGLXZXNUSU19ZngsnYaDg_MT_QVUoWbXvJwh7-MuMj5aTm_u2859Rolfw_pq6vkJuQa2K-bIw6JDZ8_FGZ38PE9DstBsh9ogcc/s1600/business-women.png" width="400" /></a></div>
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 1)  Creates an Estate: Life insurance policy
creates an estate. At any point of time the value of any other type of saving is the
total accumulation in that account only. If the savings holder unfortunately
dies, the amount  available  to the dependents  is the accumulation only. In case of the life
insurance the moment a policy  is taken
an estate in created to the extent of the sum assured under the policy i.e. if
the policy owner dies, what becomes payable to the dependents is the sum
assured   the total value of the state
and not the total premiums paid. </div>
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 2)
Encourages thrift:  Life insurance
encourages  thrift i.e., forced and
compulsory  savings. In case of  other types of savings. the moment persons
feels the need for money, there is great attraction to which money from the
savings accumulation. The purpose for which the savings accounts is opened is
seldom fulfilled for that reason. in Life insurance policies there is a
built-in discouragement  to withdraw.
Only surrender value which is  a
small  percent  of the premium. paid will be available to the
policy owner  if he wants be to withdrawn
. The policy owner thus is forced to continue 
payment of premiums and never try to surrender a policy. This will
ultimately  fulfill the purpose fore
which the policy was purchased. </div>
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<br /></div>
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3) Gift to near and
dear: Life insurance policies cannot be attached by any court of law or
income-tax authorities. A  married man
can take  a policy under married Women’s
Property Act for the benefit of his wife and / children separately and create
separate estates for their benefits. Once a policy  is obtained under his legislation  the policy 
holder will not have any hold or right over it. Life insurance thus can
be used as  a gift to the near and
dear.  </div>
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4) Protection against liquidation
of property: A Life insurance policy can be utilised <o:p></o:p></div>
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 as a collateral  security for a housing loan. In case of unfortunate
death of the policy owner, the amount available 
under the Life insurance policy is adjusted towards the outstanding  loan and interest and the house is released
to the beneficiaries  without any
encumbrance. Without such a facility the family will have to self sell the
house in the open market to clear the loan. It will be a distress sale and so
would fetch only a fraction of the real market value  of the house. Life insurance thus affords
protection against forced liquidation of property. </div>
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5)  Acts
as an Emergency fund: If immediate 
liquid cash is needed a policy of Life insurance can be against to the
Life insurance company, a Bank or any other financial institution as security
for a loan. <o:p></o:p></div>
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Life insurance thus
can acts as an Emergency Fund. banks today grant educational loans to students
for higher education. They insist on a Life insurance policy as a
collateral  security.  6) No stamp duty: Transfer of property contained
in a Life insurance policy does not attract any 
stamp duty like other property. It can be done by an assignment under sec. 38 of
Insurance  Act  1938, either by an endorsement on the back of
the policy  document or on a stamp
paper.  7)  No tax on proceeds of policy: The processed
of a Life insurance policy including  any
bonuses paid are not liable for income tax. </div>
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 8) Tax Exemption: For gaining income tax exemptions under Sec. 80C of
Income tax act, a person, can pay 
premiums under policies is the  on
his /her life or an the life is spouses 
or children, whether major of minor married or unmarried.</div>
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(9)  Simple claim settlement: Settlement of a
claim under Life insurance  policies  is very simple. In case of  a death claim, the nominee receives the
policy moneys. Incase  of survival of the
policy  holder till the date of maturity
of the policy, the maturity claim is paid 
to the policy holder himself. </div>
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10)  Safe method  of Investments : Life insurance  is a safe and profitable investments. The
IRDA constituted  by the Govt of
India  in 1998 keeps a constant  watch and vigil over the financial positions
of the Life insurance  companies. There
are strict solvency margins to be maintained by the companies. The IRDA pays
special attention  to the safety of the
moneys paid by the policy holders. thus life insurance  provides a safe method  for investments especially by the middle
class.  11) Effective management of
funds: One of the important  criteria for
investments of funds, apart from safety and liquidity is management of funds. A
life insurance  company  will have the necessary experience and
expertise in this field and a policy holder gets the benefits of the same
entirely free. Moreover the policy holder will be free of all tensions.  </div>
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ADVANTAGES OF LIFE INSURANCE

The advantage of life insurance over other types of savings instrument available in the market are as follows 1) Creates an Est...