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Insurance occupies an important place in the modern world because the risk, which can beinsured, have increased in number and extent owing to the growing complexity of the presentday economic system. It plays a vital role in the life of every citizen and has developed on anenormous scale leading to the evolution of many different types of insurance. In fact, now a dayalmost any risk can be made the subject matter of contract of insurance. The different types ofinsurance have come about by practice within insurance companies, and by the influence oflegislation controlling the transacting of insurance business. Broadly, insurance may beclassified into the following categories: In India, insurance started with life insurance.
It was in the early 19th century when the Britisherson their postings in India felt the need of life insurance cover.It started with English Companies like. ‘The European and the Albert’. The first Indian insurancecompany was the Bombay Mutual Insurance Society Ltd., formed in 1870.In the wake of the Swadeshi Movement in India in the early 1900s; quite a good number ofIndian companies were formed in various parts of the country to transact insurance business.To name a few: ‘Hindustan Co-operative’ and ‘National Insurance’ in Kolkata; ‘United India’in Chennai; ‘Bombay Life’, ‘New India’ and ‘Jupiter’ in Mumbai and ‘Lakshmi Insurance’ inNew Delhi. The risk of death is covered under insurance scheme but not under ordinary savings plans.
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Incase of death, insurance pays full sum assured, which would be several times larger than thetotal of the premiums paid. Under ordinary savings plans, only accumulated amount ispayable. It Encourages Compulsory SavingAfter taking insurance, if the premium is not paid, the policy lapses. Therefore, the insured isforced to go on paying premium. In other words it is compulsory. A savings deposit can bewithdrawn very easily.Easy Settlement and Protection against CreditorsOnce nomination or assignment is made, a claim under life insurance can be settled in a simpleway. Under M.W.P. Act, the policy moneys become a kind of trust, which cannot be takenaway, even by the creditors
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