KINDS OF INSURANCE
1) WHOLE LIFE INSURANCE
1) FIRE INSURANCE
2) ENDOWMNET LIFE INSURANCE 3) TERM LIFE INSURANCE
2) MARINE INSURANCE 3) HEALTH INSURANCE
4) MONEY-BACK LIFE INSURANCE
4) MISCELLANEOUS INSURANCE
5) UNIT LINKED INSURANCE PLANS 6) ANNUITIES
LIFE INSURANCE Life insurance is a contract between the policy holder and the insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. In return, the policy holder agrees to pay a stipulated amount (the "premium") at regular intervals or in lump sums. In some countries, death expenses such as funerals are included in the premium; however, in the United States the predominant form simply specifies a lump sum to be paid on the insured's demise.The value for the policy owner is the 'peace of mind' in knowing that the death of the insured person will not result in financial hardship.Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer. The beneficiary receives policy proceeds upon the insured's death. The owner designates the beneficiary, but the beneficiary is not a party to the policy. The owner can change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable
beneficiary, that beneficiary must agree to any beneficiary changes, policy assignments, or cash value borrowing.
WHOLE LIFE INSURANCE As the name suggests, whole life insurance is for the whole life and not just for a specified period, as in term insurance.As there is no fixed end date for the policy, only the death benefit exists and is paid to the named beneficiary. The policyholder is not entitled to any money during his or her own lifetime, i.e. there is no survival benefit. Under the whole life insurance policy the premium paying term is 35 years or till the age of 80 years whichever is more. The sum assured becomes payable only on death of life assured. The plan provides maximum death cover to the dependents for the premium paid. This is cheapest plan of insurance. Whole-life insurance guarantees a death benefit cover throughout the course of life, as against the term assurance that covers only for a certain years. Whole life policies are paid out on death of the assured or at the time of maturity i.e. 80 years whichever occurs first. Premium are to be paid throughout the life or till death, or lesser limited period, though the policy is for whole life, premiums are to be paid for limited period only. The policy continues for whole life. There are two types of policies i.e. with profits and limited payment with profit policy. On the death of the insured, the nominee usually receives the sum assured plus the bonus or the profit, if any. With some policies, the nominee might receive just the sum assured. In case of a unit-linked whole life plan, the nominee receives the value of the investments or the sum assured, whichever is higher. Although they typically offer no survival benefits, the insured can make withdrawals or take loans against the cash value of the policy. The cash value is the profit or bonus earned on the premiums paid. Some policies provide survival benefits if the insured lives up to the age of 80. On maturity, the insured receives the sum assured plus the bonus for the term of the policy. The premium for a Whole Life policy is usually paid for a longer duration of time (since the insurance coverage term is longer). However, some companies offer the insured with a portfolio choice of selecting the premium paying terms.The practical utility of whole life plans is that they can be used to leave behind an estate for one's heir(s). Certain whole life policies also offer the flexibility of regular withdrawals after a certain age. Products of whole life insurance are:1) The Whole Life Policy-Life Insurance Corporation Of India(LIC) 2) The Whole Life Policy(limited payment)-LIC 3) The Whole Life Policy(single premium)-LIC
4) Jeevan Anand-LIC 5) Jeevan Tarang-LIC
ENDOWMENT LIFE INSURANCE Endowment insurance plans provide life insurance cover for a specific period. The insured can get the sum assured plus any bonus or guaranteed additions that may accrue during the policy term. Endowment plans provide life insurance cover for a specified period. The important aspect is that on maturity i.e. if the insured survives the term of theinsurance, he/she receives the sum assured at the end of the term. A variation of the Endowment plan is the Endowment plan with Profit or Unit Linked Endowment plan with Profit. In such plans, in the event of death of the insured during the term of the policy, the nominee receives the sum assured plus the bonus/participating profit/guaranteed additions, if any. The bonus or profit is paid for the number of years that the insured survives in the policy term. In case of unit-linked plans, the nominee receives the value of the investments or the sum assured, whichever is higher. If the insured survives the term of the policy, she/he receives the sum assured plus bonus/participating profit/guaranteed additions, if any, for the entire term of the policy or the value of the investments. The premium for endowment plans is higher in comparison to term plans. If one purchases plans with GA, the premium is higher than that for a regular endowment plan. Many companies offer an option in choosing the premium paying term. Endowment plans are advisable if the insured wants to purchase a product that provides both - insurance cover and savings. Many people prefer to buy such policies for terms that mature during their retirement period. Often, the maturity amount is utilized to supplement the pension income. However, there are other ways to create/supplement your retirement income. A substantial part of the premium paid for such plans is used by the insurance company to generate the bonus or profit paid to the insured or the nominee. If one chooses to impose self-discipline and invest regularly, other saving/investment avenues, such as mutual funds, offer higher returns. Click here to learn why your insurance plan is not a good investment avenue as well. Products of endowment life insurance are:1) 2) 3) 4) 5) 6)
The Endowment Assurance Policy-LIC The Endowment Assurance Policy(limited payment)-LIC Jeevan Mitra(double cover endowment plan)-LIC Jeevan Mitra(triple cover endowment plan)-LIC New Jeevan Janaraksha Plan-LIC Jeevan Amrit-LIC
TERM LIFE INSURANCE Term assurance provides life insurance coverage for a specified term of years in exchange for a specified premium. The policy does not accumulate cash value.
Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. There are three key factors to be considered in term insurance: 1. Face amount (protection or death benefit), 2. Premium to be paid (cost to the insured), and 3. Length of coverage (term). Various insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. Common types of term insurance include Level, Annual Renewable and Mortgage insurance." Level Term policy has the premium fixed for a period of time longer than a year. These terms are commonly 5, 10, 15, 20, 25, 30 and even 35 years. Level term is often used for long term planning and asset management because premiums remain consistent year to year and can be budgeted long term. At the end of the term, some policies contain a renewal or conversion option. Guaranteed Renewal, the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Some companies however do not guarantee renewal, and require proof of insurability to mitigate their risk and decline renewing higher risk clients (for instance those that may be terminal). Renewal that requires proof of insurability often includes a conversion options that allows the insured to convert the term program to a permanent one that the insurance company makes available. This can force clients into a more expensive permanent program because of anti selection if they need to continue coverage. Renewal and conversion options can be very important when selecting a program. Annual renewable term is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. The different types of term life insurance are as follows:1) Convertible Term Assurance 2) Renewable Term Insurance 3) Level Term Assurance
4) Increasing Term Insurance 5) Decreasing Term Insurance
1) Convertible Term Assurance:- These policies are useful for persons who have low income at the beginning and they cannot afford to pay high premium in the initial years. Such plans include conversion privilege, which gives the proposer the right to convert the policy to the permanent plan(endowment plan) without evidence of health in future. If such an option is exercised, the premium for the new plan must be standard rate for such a plan and the actual age of the life insured on the date of conversion policy. 2) Renewable Term Insurance:- Though term assurance is for a fixed period, a renewable term policy gives the right to renew the policy without submitting fresh evidence of health. The new premium, however, is increased to reflect the increased age of the life insured. 3) Level Term Assurance:- Under this plan, there is a uniform premium and benefit throughout the term of the policy. In case of the death, the sum assured is payable. It is suitable for a temporary need over a short period, say one year. The renewal premium is same for every year. 4) Increasing Term Insurance:- This plan is useful in keeping the benefits in line with the time value of money. It will not wipe out the benefits received due to inflation. Under this plan, premium as well as the benefit amount increases periodically, as per agreed terms and conditions. This increase could be at fixed rate of percentage or in line with an agreed index. 5) Decreasing Term Insurance:- This type of plan is suitable when there is temporary need of insurance. Under this plan, there is a constant premium throughout the term but the benefits are reduced over a period of time. Thus, the amount payable on death of insured person depends on the timing of the death inspite of constant premium. Products of term life insurance are:1) Two Year Temporary Assurance Policy-LIC 2) The Convertible Term Assurance Policy-LIC 3) Anmol Jeevan I-LIC 4) Amulya Jeevan I-LIC
MONEY-BACK LIFE INSURANCE Get back the premiums you have paid for the insurance , Puzzled! The moneyback plans provides life insurance cover for a specified period. The insured gets back fixed, tax-free proportions from the sum assured at fixed intervals. The money-back plan provides life insurance cover for a specific period. During the term of the policy, the insured receives tax-free, fixed proportions of the sum assured at regular intervals. On maturity i.e. on surviving the entire term of the policy, the insured receives the balance portion of the sum assured, if any,plus the bonus/participating profit/ guaranteed addition for the term of the policy, if any, or the value of the investments. In the event of death of the insured during the term of the policy, the nominee still receives the entire sum assured (even if the insured had received fixed portions of the sum assured), plus the bonus/participating profit/guaranteed addition, if any. The premium for money back policies is higher in comparison to endowment and term plans. If one purchases money back plans with guaranteed addition, the premium is even higher. Some companies offer an option in choosing the premium paying term. Money back policies are advisable if the insured wants a product that provides both - insurance cover and savings. Many people prefer to buy such policies to utilize the tax-free sum of money receivable to go on a holiday, re-furnish their homes or even re-invest the same amount. However, there are other ways to utilize this income. A substantial part of the premium paid for money back plans is used by the insurance company to generate the bonus or profit paid to the insured or the nominee. If one chooses to impose self-discipline and invest regularly, other saving/investment avenues, such as mutual funds, offer higher returns. Click here to learn why your insurance plan is not a good investment avenue as well. 'MONEY BACK POLICY' plan is an excellent plan with good return on reinvestment, best suited for businessmen and professionals. Money is available at regular intervals in future to meet the specific expenses such as children's education or marriage. At the same time, the policy provides insurance protection for the family as well as old age provision. Benefits •
On Death: ○
Full sum assured is payable at death of the life assured within the term, without any deduction of earlier survival benefits. (e.g. for example, suppose a person takes a Rs.1,00,000/- policy for 20 years. At the end of the 5th and 10th year he receives Rs.20,000/- each as survival benefit. If he happens to die in the 12h year, the nominee of the life assured will receive full Rs.1,00,000/-, irrespective of the earlier benefits of Rs.40,000/-)
On Survival: Term
At the end of
Amount of money back
20% of sum assured
For Example, on a Rs. 1,00,000 policy Rs.20,000/-
10thyear 15thyear 20thyear 5thyear 10thyear 15thyear 20thyear 25thyear
20% 20% 40% 15% 15% 15% 15% 40%
of of of of of of of of
sum sum sum sum sum sum sum sum
assured assured assured assured assured assured assured assured
Minimum sum assured : Rs.40,000/-
Minimum premium must be Rs.800/- p.a.
Minimum age at entry : 13 years
Maximum age at entry : ○
20 years of policy : 50 years
25 years of policy : 45 years
Maximum maturity age : 70 years
Bonus additions to the policy are calculated for full sum assured. They are payable only along with final maturity benefit on date of maturity or on death, whichever is earlier.
No loan will be granted under these policies.
Products of money-back life insurance policy are:1) The Money Back Policy-20 Years-LIC 2) The Money Back Policy-25 Years-LIC 3) Jeevan Surabhi-15 Years-LIC 4) Jeevan Surabhi-20 Years-LIC 5) Jeevan Surabhi-25 Years-LIC 6) Bima Bachat-LIC
UNIT LINKED INSURANCE PLANS (ULIP’s)
Unit linked guidelines were notified by IRDA on 21st December 2005. The main intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk is borne by the policyholder. It is the endeavor of IRDA to enable the buyer to make the most informed decision possible when planning for financial security. We hope the following FAQs will enable a better insight to all buyers about the character and features of Unit linked Products. 1. What is a ULIP? ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. REMEMBER THAT IN A UNIT LINKED POLICY, THE INVESTMENT RISK IS GENERALLY BORNE BY THE INVESTOR. 2.
What is a Unit Fund?
The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund. 3. What is a Unit? It is a component of the Fund in a Unit Linked Policy. 1. What Types of Funds do ULIP Offer? Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and time horizons. Different funds have different risk profiles. The potential for returns also varies from fund to fund.
The following are some of the common types of funds available along with an indication of their risk characteristics.
General Description Equity Funds
Nature of Investments
Primarily invested in company stocks with the general aim of capital appreciation
Medium to High
Income, Fixed Interest and Bond Funds
Invested in corporate bonds, government securities and other fixed income instruments
Sometimes known as Money Low Market Funds — invested in cash, bank deposits and money market instruments
Combining equity investment with Medium fixed interest instruments
5). What are the Charges, fees and deductions in a ULIP? a) Premium Allocation Charge b) Mortality Charges c) Fund Management Fees d) Policy/ Administration Charges e) Surrender Charges f) Fund Switching Charge g) Service Tax Deductions
1) What is Net Asset Value (NAV)? NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on the website of the respective insurers. 2) What is the benefit payable on the maturity of the policy? The value of the fund units with bonuses, if any is payable on maturity of the
policy. Products of ULIP’s are :1) Money Plus-LIC 2) Endowment Plus-LIC 3) Fortune Plus-LIC
ANNUITIES A life annuity is a financial contract in the form of an insurance product according to which a seller (issuer) — typically a financial institution such as a life insurance company — makes a series of future payments to a buyer (annuitant) in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (regular-payment annuity), prior to the onset of the annuity. The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point the contract will terminate and the remainder of the fund accumulated is forfeited unless there are other annuitants or beneficiaries in the contract. Thus a life annuity is a form of longevity insurance, where the uncertainty of an individual's lifespan is transferred from the individual to the insurer, which reduces its own uncertainty by pooling many clients. Annuities can be purchased to provide an income during retirement, or originate from a structured settlement of a personal injurylawsuit.
TYPES OF ANNUITY Fixed and variable annuities Annuities that make payments in fixed amounts or in amounts that increase by a fixed percentage are called fixed annuities. Variable annuities, by contrast, pay amounts that vary according to the investment performance of a specified set of investments, typically bond and equity mutual funds. Variable annuities are used for many different objectives. One common objective is deferral of the recognition of taxable gains. Money deposited in a variable annuity grows on a tax-deferred basis, so that taxes on investment gains are not due until a withdrawal is made. Variable annuities offer a variety of funds ("subaccounts") from various money managers. This gives investors the ability to move between subaccounts without incurring additional fees or sales charges.
Guaranteed annuities With a "pure" life annuity, annuitants may die before recovering the value of their original investment in it. If the possibility of this situation, called a "forfeiture," is not desired, it can be ameliorated by the addition of an added clause, forming a type of guaranteed annuity, under which the annuity issuer is required to make annuity payments for at least a certain number of years (the "period certain"); if the annuitant outlives the specified period certain, annuity payments then continue until the annuitant's death, and if the annuitant dies before the expiration of the period certain, the annuitant's estate or beneficiary is entitled to collect the remaining payments certain. The tradeoff between the pure life annuity and the lifewith-period-certain annuity is that in exchange for the reduced risk of loss, the annuity payments for the latter will be smaller. Joint annuities Multiple annuitant products include joint-life and joint-survivor annuities, where payments stop upon the death of one or both of the annuitants respectively. For example, an annuity may be structured to make payments to a married couple, such payments ceasing on the death of the second spouse. In joint-survivor annuities, sometimes the instrument reduces the payments to the second annuitant after death of the first. Impaired life annuities There has also been a significant growth in the development of Impaired Life annuities. These involve improving the terms offered due to a medical diagnosis which is severe enough to reduce life expectancy. A process of medical underwriting is involved and the range of qualifying conditions has increased substantially in recent years. Both conventional annuities and Purchase Life Annuities can qualify for impaired terms.
Products of annuities are:1) Market Plus-LIC
2) Jeevan Akshay-LIC 3) Jeevan Dhara-LIC 4) Jeevan Suraksha-LIC
GENERAL INSURANCE Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc. Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown,there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business. In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the insured will have to bear a rateable proportion of the loss. For instance if the value of a property is Rs.100 and it is insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be Rs.25/- ( 50% of the loss being borne by the insured for underinsuring the property by 50% ). This concept is quite often not understood by most insureds. Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims. Accident and health insurance policies are available for individuals as well as groups. A group could be a group of employees of an organization or holders of credit cards or deposit holders in a bank etc. Normally when a group is covered, insurers offer group discounts. Liability insurance covers such as Motor Third Party Liability Insurance, Workmen’s Compensation Policy etc offer cover against legal liabilities that may arise under the respective statutes— Motor Vehicles Act, The Workmen’s Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmen’s Compensation policy ) are compulsory by statute. Liability Insurance not compulsory by statute is also gaining popularity these days. Many industries insure against Public liability. There are liability covers available for Products as well. There are general insurance products that are in the nature of package policies offering a combination of the covers mentioned above. For instance, there are package policies available for householders, shop keepers and also for professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-made ones. Suitable general Insurance covers are necessary for every family. It is important to protect one’s property, which one might have acquired from one’s hard earned income. A loss or damage to one’s property can leave one shattered. Losses created by catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless and penniless. Such losses can be devastating but insurance could help mitigate them. Property can be covered, so also the people against Personal Accident. A Health Insurance policy can provide financial relief to a person undergoing medical treatment whether due to a disease or an injury.
Industries also need to protect themselves by obtaining insurance covers to protect their building, machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance. So, most industries or businesses that are financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they insuring adequately are questions that need to be given some thought. Also organizations or industries that are self-financed should ensure that they are protected by insurance. Most general insurance covers are annual contracts. However, there are few products that are long-term. It is important for proposers to read and understand the terms and conditions of a policy before they enter into an insurance contract. The proposal form needs to be filled in completely and correctly by a proposer to ensure that the cover is adequate and the right one.
FIRE INSURANCE •
Fire Insurance is governed by All India Fire Tariff effective from 31.3.2001 issued by Tariff Advisory Committee, a Statutory Body.
The Standard Fire and Special Perils Policy covers all properties on land (excluding cost of land), moveable or immoveable, at various locations against named perils.
Special Types of Policies are designed for Stocks (declaration and floater), Building, Plant & Machinery keeping in mind the nature of property, proposers' requirements and basis of indemnification.
Long Term Policies available for Dwellings with suitable discounts in premium.
Policy can be extended to cover certain additional perils and expenses at additional premium.
Certain perils can be deleted with discount in premium rates.
Discount in premium available for good claims experience for sum insured more than Rs. 50 crores in one location and for installation of fire extinguishing appliances.
Concept of "one risk one rate" for all properties in an Industrial or Manufacturing Complex, for administrative convenience of the proposer.
Properties that are covered: All moveable/ immoveable properties of the proposer on land (excluding those in transit) broadly categorised as follows : i.
Building (including plinth and foundations, if required): •
Whether completed or in course of construction (excluding the value of land).
Interiors, Partitions and Electricals.
ii. Plant & Machinery, Equipments & Accessories (including foundations, if required) •
Bought Second hand.
iii. Stocks: •
In trade belonging to Wholesaler, Manufacturer and Retailer.
iv. Other Contents such as •
Furniture, Fixtures and Fittings
Spares, Tools and Stores
Household goods etc.
v. Specific Items such as bullion, unset precious stones, curios, work of arts, manuscripts, plans, drawings, securities, obligations or documents, stamps, coins or paper money, cheques, books of accounts, computer system records, explosives. Special types of Policies available for Stocks: a. Declaration Policy : •
To care care of frequent fluctuations in Stocks/ Stock Values
Minimum Sum Insured Rs. 1 crore per location.
Monthly declaration on any one of the following basis to be submitted before the last day of the succeeding month 1. average of the highest values at risk on each day (or) 2. highest value on any day of the month.
Refund of premium, on expiry of policy, based on the average declaration upto 50% of the provisional premium.
b. Floater Policy : •
to take care of frequent changes in values at various locations.
Single sum insured for all the stocks in all the locations.
Nominal premium loading to cover all the stocks in all the locations.
Expenses Covered: The policy automatically covers the following expenses incurred following loss / damage / destruction of a covered property as a result of the operation of an insured peril. i.
Architects, Surveyors and Consulting Engineers' Fees upto 3 % of the claim amount.
ii. Expenses incurred for removal of debris to clear the site upto 1 % of the claim amount. Exclusions Applicable: a. Losses/ Expenses not covered: i.
5% of each and every claim subject to minimum of Rs. 10,000 resulting from Lightning, STFI and Subsidence and Landslide including Rockslide and Rs. 10,000 in respect of all other perils.
ii. Expenses incurred on Architects, Surveyors' Consultant Engineers fees and Debris Removal in excess of 3% and 1% of claim amount respectively. iii. Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind. b. Properties not covered: i.
Items like manuscripts etc. unless specifically declared.
ii. Cold storage stocks due to change of temperature. iii. Loss / damage/ destruction of any electrical and/or electronic machine,apparatus, fixture or fitting arising from over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity, from whatever cause including lightning. iv. Loss / damage / destruction of Boilers, Economisers or other Vessels in which steam is generated machinery or apparatus subject to Centrifugal force, by its own explosion/ implosion.
MARINE INSURANCE Insurance was introduced to world by the concept of marine insurance. The object of marine insurance is to make good losses exposed to the seafarers due to sea conditions, war, pirates, weather, disease, spoilage, etc. The legal framework of marine insurance is provided by marine insurance act, 1963. All the related subjects like the basic principles, basis of valuation under the policies, basis of settlement of losses are laid down in this act. Marine insurance has two important and broad components. The first one is cargo insurance and the second one is hull insurance. Cargo insurance provides cover for losses or damages that could occur to goods in transit on sea, rail, road or air. This insurance is purchased by the owner of cargo/ships. Cargo insurance covers shipments by inland ships, steamers, boat and crafts, boats etc., export and import shipments and consignments shipped by rail, road or air and articles sent by post or couriers. Hull insurance covers the insurance of the carrier of the goods. This type of insurance is purchased by the owner of the transportation vehicle. In case of import-export trade, the responsibility of purchase of insurance lies with the seller if the price quoted is cost, insurance and freight(CIF). Then the seller or exporter includes the premium charges as part of cost of goods sold. Moreover, the bank gets the goods as security against the amount paid out to the exporter and hence it requires that the goods are insured against loss or damage in transit. The marine insurance policy contains the name of the insured, policy number, sum insured, premium, stamp duty, steamer or other conveyance, voyage or journey, number and details of bill of lading, interest to be insured causes which the insurance is subject and place where claims are payable. The policies in the export import trade include many clauses which are framed by the institute of London underwriters and they are used in India. The important risks covered by the institute cargo clauses are as follows: a) Fire. b) Vessel or craft being stranded, grounded sunk or capsized. c) Overturning or derailment of lanf conveyance. d) Collision or contract of vessel, craft, or conveyance with any external object other than water. e) Discharge of cargo to a port of districts.
f) General average sacrifice. g) Jettison h) Earthquake, erution or lightning
The following extraneous risks are also covered: a) Theft, pilferage or non delivery. b) Fresh water and rain water damage. c) Hook of oil damage. d) Damage by mud, acid and other extraneous substances. e) Heating and sweating. f) Breakage. g) Leakage. h) Country damage. i) Bursting or tearings of bags. However, the marine insurance does not cover the following losses: a) Loss caused by willful misconduct of the insured. b) Ordinary leakage loss, in weight or volume or wear and tear. c) Loss caused by the inherent vice or nature of the subject matter such as perishable commodities. d) Loss caused by delay. e) Loss arising from insolvency or financial default of the owners/operators. f) Loss or damage due to inadequate packing. g) War and kindred perils. h) Strikers, riots, lock-out, civil commotions and terrorism.
HEALTH INSURANCE Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. Why health insurance is essential? According to recent studies, healthcare costs have been rising at more than 20 per cent on an annualized basis. Also, out-of-the-pocket spending continues to be around 75 per cent of the total medical expenses. Given this increasing cost of medical care and treatment, it becomes essential that you have adequate health insurance cover to reduce the risk of financial difficulties in the event of a major illness or hospitalization. Even the government is getting into the act to reduce the exorbitant out-of-pocket spending, hence it has been promoting low-cost health care plans. COVERAGE A health insurance policy covers the following basic costs in case of hospitalization due to any accidents/ diseases which doesn't form a part of the permanent exclusions of the policy 1. Room, boarding expenses as provided by the hospital/ nursing home. 2. Nursing expenses 3. Surgeon, aneasthetist, medical practitioner, consultants, specialist fees 4. Operation theatre charges, surgical appliance, medical and drugs, chemotherapy, radiotherapy and similar expenses. EXCLUSIONS The exclusions on a health insurance plan vary marginally company to company. What one should pay special attention to is whether pre-existing diseases or treatment for common but expensive treatments, such as cataract or hernia are covered. The typical expenses that are not covered by a general health insurance policy are: •
Any disease/injury during first 30 days of commencement of policy (except accidental injury)
Permanent exclusions could comprise of the following illnesses:
Vaccination, inoculation, change of life, cosmetic or aesthetic treatment, plastic surgery unless necessitated due to accident or as a part of any illness
Dental treatment or surgery of any kind unless requiring hospitalization
Cost of spectacles contact lenses and hearing aids
Convalescence, general debility, "run-down" condition, sterility, venereal disease, intentional self-injury, use of drugs and intoxicants
Hospital / nursing home charges not forming part of any treatment
Nuclear perils and war group of perils
Naturopathy or non-allopathic treatment
Any internal congenital illness
Pregnancy and childbirth related diseases
Expenses arising from HIV or AIDS and related diseases
Use or misuse of liquor, intoxicating substances or drugs as well as intentional self injury
War, riots, strike, terrorism acts, nuclear weapon induced treatment. DOES AGE EFFECTS HEALTH INSURANCE PLANS AND PREMIUMS Your age definitely affects your insurance plan in terms of coverage as well as cost. The older you are, the costlier your health insurance premiums. As you grow older, your body becomes increasingly prone to illnesses, disorders, and malaise hence the increased insurance premium costs. TAX BENEFITS ON HEALTH INSURANCE Premiums paid up to Rs. 15,000 per annum under the health insurance plan for self, spouse, two dependent children are exempt from tax under section 80 D of the Income Tax Act. Moreover you can also claim deduction up to Rs. 15,000 for premium paid towards dependant parents and in case your parents are senior citizen, you can claim a deduction of Rs. 20,000.
MISCELLANEOUS INSURANCE Miscellaneous Insurance exists to help people gain a good understanding of the various kinds of insurance coverage's that are available to people today. Insurance has become a very important part of many people's lives as they realize the need to provide protection for different areas of their everyday life. There is a wide variety of types of insurance coverage available today. The dictionary defines insurance as "coverage by contract whereby one party undertakes to
indemnify or guarantee another against loss by a specified contingency or peril". This means that an individual enters into an agreement with an insurance company that will pay a set amount of money in case of a loss in a specified area. There are a number of inclusions and exclusions involved in each insurance policy with all kinds of variables that must be taken into consideration before purchasing the policy. One of the most important things to remember is that an insurance policy is a contract between the insurance company and their customer. The insurance company agrees to pay certain amounts of money in case of loss and the customer agrees to pay the insurance premiums that are required to keep the policy in place. If the customer fails to pay the premiums due, the insurance may be revoked, leaving the customer vulnerable. The contract specifically makes the insurance company liable to pay for any loss that is specifically stated in the insurance policy. Most policies will accurately describe the types of losses covered and the amount of money that the company will pay for those losses. With the increase in public awareness and the consequent thrust of the Insurance Industry in the areas of Health Insurance, Liability Insurance and other personal lines of insurances, the miscellaneous portfolio of Insurance is poised to be a sunrise portfolio of General Insurance. Glass Insurance Money Insurance Burglary Insurance Electronic Equipment Insurance Workmen Compensation Insurance Machinery Insurance Travel Accident Insurance Boat Insurance
Personal Accident Insurance Golfer Insurance General Public Legal Liability Insurance Contract Works Insurance Fidelity Guarantee Insurance Aviation Insurance All Risks Insurance
Thus miscellaneous insurance is an addition to your existing insurance giving you an extra security.
SOCIAL INSURANCE Social insurance is any government-sponsored program with the following four characteristics:
the benefits, eligibility requirements and other aspects of the program are defined by statute;
explicit provision is made to account for the income and expenses (often through a trust fund);
it is funded by taxes or premiums paid by (or on behalf of) participants (although additional sources of funding may be provided as well); and
the program serves a defined population, and participation is either compulsory or the program is heavily enough subsidized that most eligible individuals choose to participate.
Social insurance has also been defined as a program where risks are transferred to and pooled by an organization, often governmental, that is legally required to provide certain benefits