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Insurance Services
Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance policy helps in not only mitigating risks but also provides a financial cushion against adverse financial burdens suffered.

Insurance policies cover the risk of life as well as other assets and valuables such as home, automobiles, jewelery.
The functions of Insurance can be bifurcated into two parts:
  • Primary Functions
  • Secondary Functions
  • Other Functions
Primary Functions
  • Provide Protection:The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others.
  • Collective Bearing of Risk:Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.
  • Assessment of Risk:Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also
  • Provide Certainty:Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.
Secondary Functions
  • Prevention of Losses:Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured.
  • Small Capital to cover Larger Risks:Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.
  • Contributes towards the Development of Larger Industries:Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.
Other Functions
  • Means of Savings and Investment:Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance.
  • Source of Earning Foreign Exchange:Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.
  • Risk Free Trade:Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.
Brief History Of Insurance Sector In India
The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again.Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years.The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

Milestone of Life Insurance  in India
  • 1912:The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
  • 1928:The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
  • 1938:Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
  • 1956:245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
  • 1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.
  • 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.
  • 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.
  • 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

On the basis of the risk they cover, insurance policies can be classified into two categories:
  • Life Insurance Policies
  • General Insurance Policies
Life Insurance, India
Life is very fragile and death is a certainty. We cannot control the uncertainties of life. But, we can cover the risks surrounding us. Life insurance, simply put, is the cover for the risks that we run during our lives. It protects us from the contingencies that could affect us.

Life insurance is not for the person who passes away, it for those who survive. It is the responsibility of every bread earner to guard against the events that could affect the family in the unfortunate circumstance of his / her demise. Thus, having a life insurance policy is very vital. Before going for a life insurance policy it is imperative that you know about various types of life insurance policies. Major among them are:
  • Endowment Policy
  • Whole Life Policy
  • Term Life Policy
  • Money-back Policy
  • Joint Life Policy
  • Group Insurance Policy
  • Loan Cover Term Assurance Policy
  • Pension Plan or Annuities
  • Unit Linked Insurance Plan
General Insurance, India
General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary et al. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged, can be covered through General Insurance policy.

Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one's liability towards others can be covered under general insurance policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance and Public Liability Insurance have been made compulsory.

Major insurance policies that are covered under General Insurance are:
  • Home Insurance
  • Health Insurance
  • Motor Insurance
  • Travel Insurance
Insurance Companies in India
Before insurance sector was opened to the private sector Life Insurance Corporation (LIC) was the only insurance company in India. After the opening up of Insurance sector in India there has been a glut of insurance companies in India. These companies have come up with innovative and flexible insutrance policies to cater to varying needs of the individual. Opening up of the Insurance sector has also forced the Lic to tighten up its belt and deliver better service. All in all it has been a bonanza for the consumer.

Major Life Insurance Companies
  • Aviva Life Insurance
  • Bajaj Allianz
  • Birla S un Life Insurance
  • HDFC Standard Life Insurance
  • ICICI Prudential
  • ING Vysya
  • Kotak Mahindra
  • LIC
  • Max New York Life Insurance
  • Metlife India Insurance
  • Reliance Life Insurance
  • SBI Life Insurance
  • Shriram Life Insurance
  • Tata AIG Life Insurance

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