INTRODUCTION TO INSURANCE

1.The business of insurance is related to the protection of economic values of assets.
2.Insurance is a mechanism that helps to reduce the effects of perils such as fire,floods,breakdowns,lightening,earthquakes etc..
3.The business of insurance started with marine business traders in the Lloyd's Coffee House in London.
4.The first Indian insurance company was the Bombay Mutual Assurance Society Ltd,formed in 1870.
5.Life insurance business was nationalised in India with the setting up of the Life Insurance Corporation of India(LIC) on September 1,1956.
6.People who are exposed to the same risk come together and agree that if one of them suffers a loss,the others will share the loss and make good to the person who lost.That is why Insurance is the business of 'sharing'.
7.For insurance to remain a fair arrangement,the peril should occur in an accidental manner.
8.A human being is an income-generating asset.
9.Living too long can be as much a problem as dying too young.Insurance takes care of both risks.
10.Insurance extends beyond the coverage of tangible assets.For e.g. the voice of a singer or the legs of a dancer may be insured.
11.Personal accident and sickness insurance is classified as non-life in India.
12.The premiumis based on expectations of loses.
13.The insurer is in the position of a trustee,managing the common fund for and on behalf of the community.
14.A life insurance company is a major instrument for mobilisation of savings of people,particularly from the lower and middle income groups.
15.The vast amount of funds by way of premiums represents 'pooling of risks'.
16.Insurance provides tax benefits,both in income tax and in capital gains.
17.A life insurance policy is a property and can be transferred or mortgaged.
18.Loans can be raised against the policy.