Jargons Of Insurance Industry

Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance.

An insurer is a company selling the insurance.

The insured, or policyholder, is the person or entity buying the insurance policy.

The amount to be charged for a certain amount of insurance coverage is called the premium
.

The insured receives a contract, called the insurance policy.

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Insurance has a deep rooted history . It finds mentions in the writing of Manu ( Manusmriti), yaganavalkya (Dharmastra), Kautilya (Arthsastra) 1818 was the advent of Life Insurance in India with the establishment of Oriental Life Insurance Company in Calcutta. In 1928 , the Indian Insurance Co. act was enacted . An ordinance was passed on 19th January, 1956nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. LIC had monopoly till late 90s when the insurance sector was reopened for private sector.

Status Of Insurance Companies In India .

In India,
Insurance is a booming sector with huge possibilities for different global companies

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Life insurance premiums account to 2.5% and general insurance premiums account to 0.65% of India's GDP. The Indian Insurance sector has gone through several phases and changes, especially after 1999, when the Govt. of India opened up the insurance sector for private companies to solicit insurance, allowing FDI up to 26%.
However, the largest life insurance company in India is still owned by the government.

Types Of Insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

Health insurance policies cover the cost of medical treatments. Dental insurance, like medical insurance protects policyholders for dental costs. In the US and Canada, dental insurance is often part of an employer's benefits package, along with health insurance.

Home insurance provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake, that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household including pets

Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances. Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement. Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss.

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. The term property insurance may, like casualty insurance, be used as a broad category of various subtypes of insurance, some of which are listed below:

Aviation insurance . Boiler insurance Builder's risk insurance Crop insurance 2] Earthquake insurance Fidelity bond Hurricane Katrina Flood insurance Home insurance, Landlord insurance Marine insurance Surety bond Terrorism insurance volcanic eruptions. hurricanes.

Business insurance is nothing more than spreading and managing the risk among many business owners. Insurance companies take in premium payments from many covered businesses, invest those payments, and create a pool of money to pay out to a covered business if that business has a covered loss. Business insurance is a broad category. It covers everything from property and casualty insurance to health, disability and life insurance.

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