original
1.1.1. Historical 1.1.1. Historical
Background of Life Background
Insurance Insurance
The actual origin of life insurance is
hidden in the mists of antiquity. The
early development of life insurance
was closely linked with that of
marine insurance. The first insurer
of life was the marine insurance
underwriter who started issuing life
insurance policies on the life of
master and crew of the ship and the
merchants, sailing along with the
goods. These early contract took the
form of temporary assurance
covering the life assured for a short
period only.
The first recorded life policy was
issued on 18th June 1653 on the life
of MR. William Gybbons for 12
months. It was not until early in the
eighteenth century, that societies
began to be formed for issuing life
insurance. The premium rates were
varied in view of reputations and
health conditions of the insured.
The application of the mortality
tables in 1755 by Dodson and the
introduction of actuarial science
revolutionized the whole concept of
life insurance.
Life Insurance in India
Life insurance in its present form
came to India from the United
Kingdom with the establishment
of a British firm Oriental Life
Insurance Co. in Calcutta in 1818.
The British companies started life
insurance business in India by
issuing policies exclusively on the
lives of European soldiers and
CE CE
of Life Background
Insurance
Within the mists of antiquity, the
true beginning of existence
coverage is buried. The early
development of existence
insurance became inextricably
linked to the development of
marine insurance. The first life
insurer was a marine coverage
underwriter who began offering
life insurance policies based on
the existence of the ship’s master
and crew, as well as merchants
who were cruising with the
goods. These early agreements
took the form of a temporary
assurance that only masked the
presence of the confident for a
short time.
In the year 1653, on 18th of
June, the first recorded life
policy covering of MR. William
Gybbons life was provided for a
period of one year. It was not
until the early eighteenth century
that businesses began to form in
order to provide life insurance.
Premiums vary depending on the
insured’s popularity and fitness
reputation. Dodson’s acceptance
of the mortality table in 1755, as
well as the development of
actuarial technology,
transformed the entire concept of
life insurance.
Life Insurance in India
With the introduction of a
British company Oriental Life
Insurance Co. in Calcutta in
1818 among civilians, life
insurance to India from the
United Kingdom. They
occasionally imposed standards
for Native American living by
levying additional taxes.
Historical
1.1.5.
of Life
The true history of life insurance is
lost in the mists of time. The initial
emergence of life insurance was
interlinked with the marine
insurance. The first life insurer was
a marine insurance underwriter,
who began writing life insurance
policies on the master and crew of
ships as well as merchants
travelling alongside cargo. These
early contracts were in the form of
temporary assurance, which only
covered the life assured for a certain
time.
On the June 18th 1653, the first
known life policy was issued for the
life of Mr. William Gybbons for a
period of 12 months. It was not
until the early eighteenth century
that institutions for offering life
insurance began to emerge.
Premium prices were different
depending on the insured's
reputation and health. The whole
notion of life insurance was
transformed with the development
of actuarial science and the
implementation of Dodson’s
mortality tables in 1755.
Life Insurance in India
With the creation of a British
business Oriental Life Insurance
Co. in Calcutta in 1818, life
insurance in its current form
introduced to India from the United
Kingdom. British firms began their
life insurance business in India by
specialising on coverage for
European soldiers and citizens.
They occasionally created policies
civilians. They sometimes issued
policies on the lives of Indian by
charging extra charges. The first
Indian company named as the
Bombay Mutual Life Assurance
Society Ltd. was formed in
Bombay in December 1870, was
the first to cover Indian lives at
normal rates.
Objectives of Life 1.1.6.
1.1.2. Objectives of Life Insurance
Insurance Following are some objectives of Following are the objectives of life
1) Life insurance is one way to
provide security if part or all of the
family's income is cut off because
of death.
2) Financial assistance is provided to
the family of the insured on his
death.
3) Life insurance provides a mode of
investment. It develops a habit of
saving money by paying premium.
The insured get the lump sum
amount at the maturity of the
contract. Thus life insurance
encourages savings.
4) Life insurance goes beyond
providing only protection as it
can also act as an important tool
to achieve financial objectives in
one’s life.
5) Life insurance is not only a
financial aid but also helps you
save taxes. The premium of life
insurance is exempted under
Section 80C of the Income Tax
Act, 1961.
6) A life insurance policy provides
peace of mind to the policyholder
that his family won’t bear any
financial hardships in his
absence.
7) You may desire to send your kid
to the best university abroad, buy
a home for your family or
secure retirement for your
spouse. Sudden loss of your
income might jeopardize the
continuity of investments and
savings towards such goals,
depriving your family of things
they deserve. As a result, you
must prioritize your family’s
investment goals and provide
protection for them by including
the target amount in the policy
coverage.
Bombay Mutual Life Assurance
Society Ltd., India's first
company, was founded in
Bombay in December 1870 and
was the first to cover Native
American life at standard rates.
1.1.2. Objectives of Life
Insurance
life insurance:
1) If a family’s income is
interrupted due to the death
of the earner, life insurance
may be a solution to protect
the family.
2) On the death of the insured
person, financial assistance is
offered to his family.
3) It offers a form of
investment. It encourages
people to save money by
charging a premium. At the
conclusion of the
arrangement, the assured
receives a single amount
total. In this way, life
insurance allows you to build
up your emergency money.
4) Life insurance can be used
for more than just assurance;
it can also be used to achieve
financial goals in one’s daily
life.
5) Life insurance is not only a
financial advisor, but it also
helps you save money.
Section 80C of the Income
Tax Act of 1961 exempts the
cost of life insurance.
6) It provides the policyholder
peace of mind that his family
will not face financial
hardships in his
nonexistence.
7) One may like to send his
child to the top university in
the world, purchase a
property for family, or
that imposed additional fees on the
life of Indians. The Bombay
Mutual Life Assurance Society
Ltd., the first Indian firm, was
founded in Bombay in December
1870 and was the first to insure
Indian lives at standard rates.
insurance:
1) To provide security in case a
part or all of the income of the
family is cut off due to death.
2) To provide financial assistance
to the family of the
policyholder on his death.
3) To act as an investment mode
and encourages savings as is
develops habit of saving by
paying premiums. At the
maturity of the contract, the
insured get lump sum amount.
4) To provide protection as well as
the effective medium to attain
financial goals in a person’s
life.
5) To provide financial aid
alongwith the tax savings as the
life insurance premium is
exempted under Section 80C of
IT Act, 1961.
6) To provide ease to the
policyholder that his family
would not have to face financial
struggle after his death.
7) To assists in regular investment
and provide great returns with
loyalty benefits as it ensures the
guaranteed maturity amount
depending on the potential risk
and need.
8) Life Insurance is an excellent
savings option to meet your
requirement. The regular
investments fetch you great
returns along with loyalty
benefits. It assures a guaranteed
maturity amount based on your
risk appetite and need.
Generally, in your absence, your
family or estate becomes liable for
any debt you owe. All of your loans,
which may include motor vehicle
loans, home mortgage, credit cards
and personal loans, must be settled in
full. Therefore, it is necessary to
include your obligations in your
policy so that your beneficiaries can
continue paying off loans. This step
becomes even more important if your
loans are secured by collateral that
your family needs to continue using,
like your home or the family car.
1.1.3. Insurance
Proposal/Application
Proposal/Application for
Life Insurance Policy
Life Insurance Policy
The contract for the life insurance
starts with the proposal made by the
proposer in standard application
form available with insurance
company and then various other
documents are prepared. The
proposal form is a standardized
form. The proposal form is a type
of an application form, which a
proposer has to fill all the relevant
details about the life to be assured.
The agent has the proposal form
with him provided by the insurer.
There are different types of policies
and so the different types of
proposal forms are there. It has the
entire details regarding the duration
of the policy, type of plan, mode of
payment, etc. A proposal form is to
be completed by the proposer in his
own handwriting and signed in the
presence of the agent. The proposal
form contains a declaration at the
end, to ensure the authenticity of
provide a comfortable
retirement to spouse and
other family members. A
sudden loss of income could
damage one’s family ability
to save and invest for such
goals, depriving them of
items they deserve. As a Normally, a person’s family will be
result, one must put their liable for any debts or loans he
family’s investing goals first owes like motor vehicle loans,
home mortgage, personal loans, and
and ensure that they are
so on. Thus, it is critical for a
protected by putting the
person to include his obligations to
target amount in the his policy so that his beneficiaries
insurance coverage. can continue to pay-off debts. In
8) Life insurance is a great way case, if a person’s loans are secured
to save money and suit ones by collateral that his family needs to
needs. Regular investments continue using such as home or the
yield excellent profits as well family car, this set becomes even
as loyalty rewards. It more critical.
guarantees a specific
maturity amount based on
one’s risk tolerance and
requirements.
Insurance
1.1.3.
for 1.1.7. Insurance
Proposal/Application for
The agreement for disaster Life Insurance Policy
protection begins with the
The life insurance contract begins
proposer’s proposal in a standard
with the proposer’s proposal on a
application format available from
standard application form provided
the insurance agency, and then
by the insurance company, followed
several reports are prepared. A
by the preparation of several
normalised structure is the
supplementary papers. A uniform
proposition structure. The
proposal form is used. The proposal
proposition structure is a type of
form is a sort of application form in
application structure in which a
which the proposer must fill out all
proposer must fill in all relevant
pertinent information regarding the
details about the life to be assured.
life to be ensured. The insurer has
The backup plan has provided the
issued the agent with a proposal
specialist with the proposal
form. There are several sorts of
structure. There are many different
policies, as well as various types of
kinds of strategies, and thus many
proposal formats. It contains all
different forms of proposition
pertinent information, such as the
structures. It contains all
policy’s duration, plan type, and
information on the term of the
payment method. The proposer
agreement, the type of plan, the
must fill out a proposal form in his
mode of payment, and so on. A
own handwriting and sign it in front
proposal structure must be
of the agent. A declaration is
completed in the proposer’s own
included at the conclusion of the
handwriting and endorsed in front
proposal form to confirm the
of the specialist. It must include:
the information given. Usually the
proposal form contains the
following information to be filled
by the prospective insured:
1) Name of life assured,
2) Address,
3) Date of Birth,
4) Occupation,
5) Age,
6) Name of the employer (if any),
7) Sum assured of the proposed
policy,
8) Number and age of the family
members,
9) Family medical history, and
10) Proposer’s medical history.
Besides these there are other related
forms regarding health, occupation,
the agent’s confidential report and
many others. In addition there is a
consent letter which shows the
consent of the life assured to the
imposition of some clause or extra
premium, duly signed by the life
assured.
In all cases, a proposal for grant of a
cover, either for life business or for
general business, must be evidenced
by a written document. An insurer
should furnish a copy of the proposal
form to the insured free of charge,
within 30 days of the acceptance of a
proposal. The forms and documents
used in the grant of cover may,
depending upon the circumstances
of each case, be made available in
languages recognized under the
Constitution of India. In filing the
form of proposal, the prospect is to
be guided by the provisions of
Section 45 of the Insurance Act. Any
proposal form seeking information
for grant of life cover may
prominently state the requirements
of Section 45 of the Insurance Act.
Where a proposal form is not used,
the insurer should record the
information obtained orally or in
writing, and confirm it within 15
days with the proposer and
incorporate the information in its
cover note or policy. The onus of
proof would rest with the insurer in
1) Name of life assured,
2) Address,
3) Date of Birth,
4) Occupation,
5) Age,
6) Name of the employer (if any),2) Address,
7) Sum assured of the proposed
policy,
8) Number and age of the family
members,
9) Family medical history, and
10) Proposer’s medical history.
There are also linked systems for 8) Number and age of family
health, employment, the
specialist’s secret report, and a 9)
variety of other things. There is
also an assent letter, which
demonstrates the life guaranteed
consent to the annoyance of
some provision or further
exceptional, as necessary.
A proposal for awarding a cover,
whether for life business or
general business, should always
be backed up by a written
record. In around 30 days
following the acknowledgement
of a proposition, a backup plan
should outfit a duplicate of the
proposal structure to the
guaranteed for nothing. The
structures and reports used in the
award of cover may be made
available in languages
recognised under the Indian
Constitution, depending on the
circumstances of each case. The
possibility is to be directed by
the provisions of Section 45 of
the Insurance Act when
documenting the type of offer.
Any proposal structure asking
for information to award life
insurance may clearly state the
requirements of Section 45 of
the Insurance Act. Where a
proposal structure is not used,
the backup plan should collect
data obtained verbally or on
paper, confirm it within 15 days
accuracy of the information
provided. The proposal form
usually asks the potential insured to
fill out the following information:
1) Name of the life assured,
3) Date of Birth,
4) Occupation,
5) Age,
6) Employer Name (if any),
7) Sum assured of the proposed
policy,
members,
Medical history of the family,
and
10) Medical history of the proposer.
Other forms pertaining to health,
occupation, the confidential report
of the agent, and many others are
available. There is also a permission
letter, signed by the life assured that
demonstrates the life assured’s
approval to the imposition of some
provision or extra premium.
Whether for life or general
business, a written document must
be used to support a proposal for
the grant of a cover. Within 30 days
of a proposal’s acceptance, an
insurer shall provide a free copy of
the proposal form to the insured.
Depending on the circumstances of
each case, the forms and
documentation used in the provision
of cover may be made accessible in
languages recognised by the Indian
Constitution. The prospect must
follow the provisions of Section 45
of the Insurance Act when filing the
form of proposal. The requirements
of Section 45 of the Insurance Act
must be stated by the proposal form
required information for the grant
of life cover. The insurer must
record the information obtained,
either in written or in oral form, and
must confirm it with the 15 days
with the proposer and include the
information in its cover note or
policy, in case, where a proposal is
not used. In the event that the
insurer argues that the proposer
respect of any information not so
recorded, where the insurer claims
that the proposer suppressed any
material information or provided
misleading or false information on
any matter material to the grant of a
cover.
Wherever the benefit of nomination
is available to the proposer, in terms
of the Insurance Act or the
conditions of policy, the issuer
should draw the attention of the
proposer to it and encourage the
prospect to avail the facility. The
proposals should be processed by
the insurer with speed and
efficiency and all decisions should
be communicated by it in writing
within a reasonable period not
exceeding 15 days from receipt of
proposals by the insurer.
with the proposer, and integrate concealed any material information
the information in its cover note or supplied misleading or inaccurate
or strategy. In the case of any information on any topic material to
data not properly recorded, the the grant of a cover, the onus of
proof would be on the insurer.
onus of proof would fall on the
backup plan, where the
guarantor ensures that the
proposer withheld any material The issuer shall inform the proposer
data or provided deceptive or about the benefit of nomination to
misleading data on any topic the proposer, whenever available
relevant to the award of a cover. under the Insurance Act or policy
conditions, and encourage the
The backer should attract the prospect to take use of it. The
proposer's attention to any place insurer should process the proposals
where the benefit of designation quickly and efficiently, and it shall
is available to the proposer, such communicate any choices in writing
within a reasonable time frame of
as the Insurance Act or the states not more than 15 days after
of strategy, and urge the receiving the proposals.
proposer to take advantage of it.
The backup plan should handle
the recommendations quickly
and effectively, and all decisions
should be delivered as a hard
copy within a reasonable length
of time, not exceeding 15 days
from the receipt of the proposal
by the guarantor.

1.1.4. Policy
Life insurance is a contract between
a life insurance company (the
insurer) and the entity buying the
policy (the insured or policy
holder). An insurance policy where,
in exchange for a premium, the
insurance company pays a certain
benefit to the survivors of the
policyholder upon his/her death.
Life insurance can help defray costs
of the funeral, pay off the estate’s
debts, and may provide for the
survivors’ (notably a widow or
widower) future.
The life insurance policy document
is evidence of the contract between
the insurer and the insured. Its three
cornerstones are the definition of
the risk, the premium and the
amount of insurance. The document
1.1.4. Policy
A contract among a life
insurance firm and the individual
is known as life insurance (the
safeguarded or policy holder). In
exchange for a fee, the insurance
company pays a predetermined
payout to the policyholder’s
survivors. The funeral, the
home’s responsibilities, and the
survivor’s eventual fate can all
be covered by life insurance
(especially a widow or single
man).
The life insurance policy
document serves as proof of the
contract between the insurer and
the insured. Its three pillars are
the risk definition, the premium,
and the amount of insurance.
The paper does not require a
conventional or uniform format.
1.1.8. Policy
A contract between a life insurance
company (known as the insurer)
and the entity purchasing the policy
(known as the insured or policy
holder) is known as life insurance.
An insurance policy in which the
insurance company provides a
specified benefit to the
policyholder’s survivors in return
for a premium. Life insurance can
assist pay for the burial, the estate’s
debts, and the future of the
survivors (particularly a widow or
widower).
The contract between the insurer
and the insured is documented in
the life insurance policy document.
The definition of the risk, the
premium, and the quantity of
need not have a standard or uniform
format. The pattern may vary from
company to company and even
differ for various types of policies.
An insurer may, however, use the
same format for all contracts of the
same type.
1.1.5. Policy Document
The standard policy document
typically has three parts:
1) Policy Schedule: It forms the
first part. It is usually found on
the face page of the policy. The
schedules of life insurance
contracts would be generally
similar. They would normally
contain the following
information:
i) Name of the insurance
company,
ii) Some specific details for
the particular policy such
as:
a) Policy owner’s name
and address.
b) Date of birth and age
last birthday.
c) Plan and term of policy
contract.
d) Sum assured.
e) Amount of premium.
f) Premium paying term.
g) Date of
commencement, date of
maturity and due date
of last premium.
h) Whether policy is with
or without profits.
i) Name of nominee.
j) Mode of premium
payment – yearly; half
yearly; quarterly;
monthly; via deduction
from salary.
k) The policy number –
which is the unique
identity number of the
policy contract.
iii) The insurer’s promise to
pay. This forms the heart of
the insurance contract, and
The example can vary from one
organisation to another and even
vary for different types of
arrangements. However, a safety
net provider may use similar
organisations for any agreement
of a similar nature.
insurance are its three pillars. A
standard or consistent format is not
required for the paper. The pattern
may differ from one firm to the
next, and even between different
sorts of policies. However, an
insurer may use the same structure
for all such contracts.
1.1.9. Policy Document
Following three parts are included
in the standard policy document:
1) Policy Schedule: The first part
is the policy schedule. It is
generally incorporated in the
first page of the policy. Usually,
all the life insurance contracts
would have similar schedules.
Following information are
generally included in it:
i) Insurance company name,
ii) Some certain information
for specific policy like:
a) Name and address of
the policyholder,
b) Date of Birth and age
last birthday,
c) Policy contract’s plan
and term,
d) Sum assured,
e) Premium amount,
f) Term of paying
premium,
g) Date of
commencement,
maturity and due date
of last premium,
h) Whether policy is with
or without profit,
i) Name of the Nominee,
j) Mode of paying
premium, i.e., yearly;
half yearly; quarterly;
monthly; via deduction
from salary.
k) Policy number, which
is the unique identity
number of the policy
contract.
iii) The promise to pay by the
insurer. It is one of the most
critical elements of the
 iv) The signature of the
authorized signatory
alongwith policy stamp.
2) Standard Provisions: The
second component of the policy
document is made of standard
policy provisions, which are
normally present in all life
insurance contracts, unless
specifically excluded. Some of
these provisions may not be
applicable in the case of certain
kinds of contracts, such as term,
single premium or non-
participating (in profits) policies.
These provisions define the
rights, privileges, and other
conditions, which are applicable
under the contract.
3) Specific Policy Provisions:
The third part of the policy
document consists of specific
policy provisions that are
specific to the individual policy
contract. These may be printed
on the face of the document or
inserted separately in the form
of an attachment. While
standard policy provisions, like
days of grace or non-forfeiture
in the case of lapse, are often
statutorily provided under the
contract, specific provisions
generally are linked to the
particular contract between the
insurer and the insured. For
example, a clause precluding
death due to pregnancy for a
lady who is expecting, at the
time of writing the contract.
Insurance companies everywhere
are generally allowed to select the
actual wording their policy
documents, but these may need to
be submitted to the regulator for
approval.
1.1.6. Rights Under Life
Insurance Policies
A life insurance contract is an
actionable claim, in which the
policyholder has a right of title to
the claim. In the large majority of
contract act, and
iv) Sign of authorised
signatory with stamp.
2) Standard Provisions: Unless
specifically excluded, standard
policy provisions are included
all the policy contracts and is
the most important element of
the policy document. In some
specific types of contracts like
term, premium or non-
participating policies, many of
these provisions are not
applicable. These provisions
represent the privileges, rights
and other conditions which are
valid under the contract.
3) Specific Policy Provisions:
Specific policy provisions
specific to the individual policy
contract comprises the third
part of the policy document.
These can either be printed on
the front of the paper or placed
as an attachment. Standard
policy features, such as days of
grace or non-forfeiture in the
event of lapse, are frequently
spelled out in the contract, but
specific clauses are usually tied
to the insurer-insured
relationship. For example, a
clause prohibiting death due to
pregnancy for a woman who is
pregnant at the time the contract
is written.
Insurance firms are typically free to
choose the exact wording of their
policy paperwork, albeit they may
need to be submitted to the
regulator for approval.
1.1.10.Rights Under Life
Insurance Policies
In life insurance contract,
cases, the policyholder and the life
assured are one and the same
person. Indian law gives the latter
the right to transfer or confer the
benefits which are payable under
the contract to another person or
entity. The two basic methods by
which the right to make a claim is
passed on are assignment,
nomination and title and claim.
Title: The word “title” is a legal
term that means one has legal
ownership of property. When any
people buy a home, there is a need
to ensure that the people selling it
actually have legal title. With
increasing demand for residential
and industrial properties across
India, there is scope for frauds in
the realty transactions.
Title insurance is a cover that
protects a potential owner of a
property against loss from defects
in title. The policy is a retrospective
one, where the insured is protected
against losses arising from the
events that occurred prior to the
date of issuing the policy. Globally,
the policy is bought by investors,
occupiers and financiers.
A title insurance policy is a contract
of indemnity that promises to pay
for a loss upto the face amount of
the policy if the state of the title is
different than it is set-out in the
policy and if the insured suffers a
loss as a result of the difference. A
title insurance policy will cover
both claims arising out of title
problems that could have been
discovered in the public records and
those so-called non-record defects
that could not be discovered in the
record even with the most complete
search. A title insurance policy will
not only protect the insured for as
long as they have an interest in the
property, but it will also protect
their heirs and devisees for as long
as they hold title to the property.
policyholder has the right of title to
the claim as it is an actionable
claim. In most of the cases,
policyholder and life assured is the
same person. According to Indian
law, the latter has the authority to
transfer or confer the contract’s
advantages to another person or
entity. Assignment, nomination,
title and claim are four commonly
used methods through which right
to make a claim is passed on.
Title: The term “title” is a legal
term that denotes legal property
ownership of a person. When
someone buys a house, they must
make certain that the persons
selling it have legal title. With
rising demand for residential and
industrial properties across India,
real estate fraud is becoming more
common.
A title insurance policy protects a
future property owner against loss
due to title flaws. The insurance is
retroactive, meaning that the
insured is covered for damages
caused by events that occurred
before the policy was issued.
Investors, occupiers, and financiers
all across the world purchase the
policy.
A title insurance policy is an
indemnity contract that offers to
pay for a loss up to the policy’s face
amount if the status of the title
differs from the policy’s description
and the insured suffers a loss as a
result of the discrepancy. A title
insurance policy will cover both
claims emerging from title
difficulties that may have been
detected in public records as well as
claims arising from so-called non-
record faults that could not be found
in the record even after a thorough
search. This insurance policy will
cover the insured as long as they
have an interest in the property and
as long as their heirs and devisees
have title to it.