Role of Insurance in Society

Country's economic development is directly dependent on the Insurance companies.

Contribution of Insurance companies:-

1. A huge amount that is collected in the form of premiums forms a strong foundation towards the security of an Individual or a Group of Individuals,Industry and commerce.

2. A sense of protection leads to expansion and development of business and industry.Thus, increasing job opportunities in the country.

3. With an increased employment,there is an increase in economy and national productivity.

4.Removal of fear, anxiety,worry encourages a free investment of capital.

Insurance and Social Security

• The Employees State Insurance act,1948 provides for Employees State Insurance Corporation  pay for the expenses of sickness,disablement,maternity and death
• The Crop Insurance Scheme ( RKBY) provides benefit to the insured farmer as well as community which is directly or indirectly linked.
• Rural Insurance schemes provide security to the rural families.
• Janata Personal Accident and Jan Arogya are few government backed schemes for the citizens in India.

Risk Management

''Life is inherently risky.There is only one big risk you should avoid at all costs, and that is the risk of doing nothing.''- Denis Waitley

So True - Isn't it???

And Insurance Sector plays a vital role in Risk Taking Decisions, as one can go ahead and grow, by transferring all the stress and anxiety to the Insurance Company.

The traditional way of handling risks can be classified into 4 categories:-

1. Risk Avoidance
2. Risk Retention
3.Risk Reduction and control.
4. Risk Financing

Risk Financing can be either through Self Financing or by Risk Transfer.

And Insurance is one of the major form of Risk Transfer.

How Insurance Works

Working of Insurance

Small contributions from many such owners having similar kind of assets are accumulated as a 'common fund'.And in case of any unfortunate happening with the few unlucky one,the loss is compensated from the same 'common' fund.

Process

• An asset which has an economic value must be identified.
• An asset can be classified as:- Physical (Car,House), Non-Physical( Goodwill,Name), Personal(Body parts such as,eyes,limbs etc.).
• An asset is always interconnected with a Risk Factor because of Peril(the cause behind the risk).
• Then,comes a Principle known as Pooling,where contributions (premiums) from various investors is collected.
• This pool of funds is used to compensate the losses suffered by the unfortunate ones.

Thus, as a whole Insurance reduces Burden, Stress and a feeling of Insecurity.

Types of Burden

1. Primary

2. Secondary

Primary Burden:- It refers to the losses suffered by the household or the business unit.These kind of losses are measurable and can be easily compensated by the insurance.

Secondary Burden:- It refers to the stress and anxiety that one suffers when there is an uncertainty of  losses .

History of Insurance in India

   Modern Insurance Agencies

1. The Oriental Life Insurance Co. Ltd.:- It was an English company and emerged as an First Life Insurance Company in India.
2. Triton Insurance Company Ltd.:-  The First Non-Life Insurance Company in India.
3. Bombay Mutual Assurance Society Ltd.- The First Indian Insurance Company founded in1870 in Mumbai.
4. National Insurance Company Ltd. :- The oldest and still operating Insurance company of India founded in 1906.

  ACTS AND SETUPS

• The Insurance act ,1938 was the first legislation enacted to regulate the conduct of insurance company in India.
• LIC(Life Insurance corporation) of India was formed on 01.09.1956, and by this Life insurance business was nationalised in India.
• LIC held exclusive rights to do business in India from1956-1999.
• GIC and its 4 subsidiaries were formed in 1972 ,with the enactment of GIBNA (General Insurance Business Nationalisation  Act),and with this general insurance business was nationalised.
• Malhotra Commitee was setup in 1993 to recommend changes for development of Industry and to introduce new element of competition.
• Insurance regulatory authority was setup in1997.
• IRDA(Insurance Regulatory and Development Authority ) was formed in April 2000 ,with the enactment of Insurance Regulatory and Development Act ,1999.

Importance of Life Insurance for an Individual

A sudden emergence of the nuclear family and melting away of the joint family demanded an alternative system of security.

 


 Emergence > LLOYDS > Amicable Society for a Perpetual Assurance

LLOYDS:-  LLOYD'S Coffee House in London was a traders gathering point,where they used to agree on sharing the losses to their goods being carried by ships.

                               

Amicable Society for a perpetual Assurance :- It is the first Life Insurance company in the world, founded in 1706 in london.

                                                             

Introduction to Insurance

   Introduction to Insurance


     History

• Events happening around us- Landslide,Fire,Flood,Lightning,Earthquake.
• These events are unpredictable and can cause economic loss and grief.
• Individuals ,who are affected by such events can be backed by a community,by having a system of sharing and mutual support.
• Idea of Insurance took place thousands of year ago but the business came into existence since 3000 B.C.
• Insurance through the ages:-Babylonian traders,Traders from Baruch and Surat,Greeks,Inhabitants of Rhodes,Chinese Traders.
• Babylonian Traders:-Bottomry loans prevailed at that time.Under this,Loan against security of the ship or its goods had to be repaid only when ship arrived safely to its destination.
• Traders from Baruch and Surat:-Similar practice as of babylonian traders prevailed
• Greeks:-Benevolent societies in the 7th century A.D. was setup to take care of the funeral and families.
• Inhabitants of Rhodes:-Owners of the goods,who lost nothing during the distress would bear the losses in some proportion.
• Chinese Traders:-They used to segregate the goods into different boats,In this way,they used to distribute the loss.Therefore,if any of the boat suffers ill fate,the loss will be minimal.

IRDA IC33 - Agent Pre Recruitment Exam

                                    IRDA  IC 33 - Agent Pre Recruitment exam

INTRODUCTION

IRDA IC33 is a pre-recruitment qualification exam,for those ,who wants to become 'Life Insurance Ágent'. It is conducted by Insurance Institute of India.

Eligibility criteria

For Urban area:- one should be 12th passed.

For Rural area :- one should be 10th passed.

Syllabus

• Introduction to Insurance
• What Life Insurance involves
• Legal Principles of Life Insurance
• Financial planning
• Life Insurance Products-I
• Life Insurance Products-II
• Pension and Annuities
• Health Insurance
• Applications of Life Insurance
• Pricing and valuation in Life Insurance
• Documentation-Proposal Stage
• Documentation-Policy Condition-I
• Documentation-Policy Condition-II
• Underwriting
• Payments under a Life Insurance Policy
• Regulatory Aspects
• Life Insurance Agency as a Career 
• Life Insurance selling Process
• Customer Service
• Grievance Redressal Mechanism