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A2. PERMANENT LIFE INSURANCE :
In a Permanent Life contract, a
portion of the money paid as premiums is invested in a fund that
earns interest on a tax-deferred basis. Thus, over a period of
time, this policy will accumulate certain "cash value" which you will be
able to get back either during the period of the policy or at the end of
the policy.
Your need for life insurance can change over a
lifetime. At any age, you should consider your individual circumstances and the
standard of living you wish to maintain for your dependents. In most cases, you
need life insurance only if someone depends on you for support. Your life
insurance premium is based on the type of insurance you buy, the amount you buy
and your chance of death while the policy is in effect. This type of
policy not only provides protection for your dependents by paying a death
benefit to your designated beneficiary upon your death, but it also allows you
to use some part of the money while you are alive or at the end of the
policy. Some examples of such policies are :- Whole Life,
Universal Life and Variable-Universal Life.
ENDOWMENT POLICIES
These policies provide
for period payment of premiums and a lump sum amount either in the event of
death of the insured or on the date of expiry of the policy, whichever occurs
earlier.
MONEY BACK POLICIES
These policies provide
for periodic payments of partial survival benefits during the term of the policy
itself. A unique feature associated with this type of policies is
that in the event of death of the insured during the policy term, the designated
beneficiary will get the full sum assured without deducting any of the survival
benefit amounts, which have already been paid as money-back components.
Moreover, the bonus on such policies is also calculated on the full sum assured.
ANNUITY / PENSION
POLICIES / FUNDS
This policies / funds
require the insured to pay the premium as a single lump sum or through
installments paid over a certain number of years. The insured
in return will receive back a specific sum periodically from a specified date
onwards (the returns can can be monthly, half yearly or annually), either
for life or for a fixed number of years. In case of the death of the insured, or
after the fixed annuity period expires for annuity payments, the invested
annuity fund is refunded, usually with some additional amounts as per the terms
of the policy.
Annuities / Pension
funds are different from from all other forms of life insurance as
an annuity policy / fund does not provide any life insurance cover but
merely offers a guaranteed income either for life or a certain period.
Therefore, this type of insurance is taken so as to get income after the
retirement.
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Marine Insurance - What
is **
The marine insurance is considered as the oldest form of insurance.
Travelers by sea and
land were very much
exposed to the risk
of losing their
vessels and
merchandise because
the piracy on the
open seas and
highway robbery of
caravans were very
common.
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 borne
by the unfortunate
individual victims.
The
co-operative 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 Brogans. On
the demand of the
inhabitants of
Burges, the Court of
Flanders permitted
in the year 1310,
the establishment 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
Lombard's and to the
Hansa merchants; it
spread throughout
Spain, Portugal,
France, Holland and
England. The marine
form land lending
prominence of
Lombard's 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.
Fire
Insurance:
After marine
insurance, fire
insurance developed
in present form.
It had been
originated in
Germany in the
beginning of
sixteenth century.
The fire insurance
got momentum in
England after the
great fire in 1666
when the fire losses
were tremendous.
About 85 per
cent of the houses
were burnt to ashes
and property worth
of sterling ten
crores were
completely burnt
off.
Fire Insurance
Office was
established in 1681
in England. With
colonial development
of England, the fire
insurance spread all
over the world in
present form 'Sun
Fire Office was
successful fire
insurance
institution.
In India, the
general insurer
started working
since 1850 with the
establishment of the
Triton Insurance,
Calcutta. Again in
1861, the North
British and
Mercantile catered
the requirements of
insurance business.
The general
insurance in India
could not progress
much. The slow
growth of
joint-stock
enterprise and
mechanised
production was
another reason for
the low level of
general insurance
business.
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