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Birla Sun Life_garima_group 3

Birla Sun Life_garima_group 3

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Published by mukesh chhotala

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Published by: mukesh chhotala on Oct 01, 2010
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10/01/2010

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SUBMITTED TO SUBMITTED BYMr.B.S.Rao Sir Garima Khandelwal
B2-17PGDM (BIFAAS)
 
 
INTRODUCTION
 
Insurance = Collective bearing of Risk 
Insurance is nothing but a system of spreading the risk of one onto the shouldersof many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency,insurance is a method or process which distributes the burden of the loss on anumber of persons within the group formed for this particular purpose.Basic Human trait is to be averse to the idea of risk taking. Insurance, whether lifeor non-life, provides people with a reasonable degree of security and assurancethat they will be protected in the event of a calamity or failure of any sort.Insurance may be described as a social device to reduce or eliminate risk of loss tolife and property. Under the plan of insurance, a large number of people associatethemselves by sharing risks attached to individuals. The risks, which can be insuredagainst, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with therisk involved. Thus collective bearing of risk is insurance.
Insurance Indemnifies Assets & Income. Every Asset has a value andgenerates Income to its Owner. There is a normally expected Life-time for the Assetduring which time it is expected to perform. If the Asset gets lost earlier, beingdestroyed or made Non-functional through an Accident or other unfortunate eventthe Owner is Prejudiced. Insurance helps to reduce CONSEQUENCES of suchAdverse Circumstances which are called Risks
Insurance is the science of spreading of the ris. It is the system of spreading the losses of an Individual over a group of Individuals
Insurance is a Method of sharing of financial lossesof a few from acommon fund formed out of Contribution of the many who are equallyexposed to the same loss
 
What is uncertainty for an Individual becomes a certainty for aGroup. This is the basis of All Insurance Operations. Thusinsuranceconvert uncertainties to certainty
DEFINITIONS
The definition of insurance can be made from two points:
1
Functional definition.
2
Contractual definition.
Functional definition
Insurance is a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to insurethemselves against the risk.
General Definition
Insurance has been defined to be that in which a sum of money as a premium ispaid in consideration of the insurer’s incurring the risk of paying a large sumupon a given contingency.In the words of John Magee, “Insurance is a plan by themselves whichlarge number of people associate and transfer to the shoulders of all, risks thatattach to individuals.”
Fundamental Definition
In the words of D.S. Hansell, “Insurance accumulated contributions of all partiesparticipating in the scheme.”
Contractual Definition
In the words of  justice Tindall, “Insurance is a contract in which a sum of money ispaid to the assured as consideration of insurer’s incurring the risk of paying a largesum upon a given contingency.”
 

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