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93091030 Final Report on Insurance

93091030 Final Report on Insurance

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Published by Shiva Shanker

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Published by: Shiva Shanker on Jul 05, 2012
Copyright:Attribution Non-commercial

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07/05/2012

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Page 1
 
INTRODUCTION
ABOUT THE INSURANCE INDUSTRY
 
What Is Insurance
 
Purpose And Need
 
Role Of Insurance In Economic Development
 
Types Of Insurance
 
Why Life Insurance Is Required
 
List Of Indian Insurance Company
 
 
Page 2
 
WHAT IS INSURANCE
Every asset has a value for its owner and also for those who are benefited with the existence of that asset. Insurance is concerned with the protection of economic value of assets.All of us are interested in the creation of assets because:1.
 
All assets have values.2.
 
They yield income to the owner.3.
 
They meet some other needs of the owner.4.
 
They may provide satisfaction of some needs and also yields income tothe owner.The benefit may be an income or in some other form.
Example:
 
A house has a value.
 
A car is useful for providing traveling comfort to the owner and other members of hisfamily .There is no direct income.
 
An owner of a factory receives income by sale of its products.
 
A farmer may rear a cow with the expectation of getting milk for his family and makingsome money from the sale of excess milk.
 
 
Page 3
 
Every asset has normally an expected lifetime. During this period, it is expected to perform andprovide income/comfort to the owner. The owner, being aware of this, plans the things in such away that by the time the expected lifetime of the asset expires, he is ready with funds requiredfor its replacement. In this way, he ensures that the value or income from the asset is not lostWell this appear to be a fine arrangement provided the asset completes its lifetime.All assets carry the risk of being destroyed or damaged. But all assets may not necessarily getdestroyed or damaged. Only in a few instances, the probability turns out to be true and the assetgets actually lost or destroyed by accident or some other unfortunate event before the completionof its excepted lifetime. The owner and those deriving benefits from the asset will suffer becausethe arrangement to make available its substitute is not yet ready.Insurance is helpful in mitigating such adverse consequences. To sum up, assets are insured, asthey are likely to be lost or made non-functional through an accidental occurrence.Insurance does not protect the assets. This means that insurance can not prevent loss to the assetsdue to perils. Nor can insurance avoid the occurrence of perils. It only compensates, may not befully, the economic or financial loss resulting to the asset from such damage or destruction.

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