Types of Insurance

Types of Insurance
• Life Insurance.
• General Insurance.
-Health Insurance and Medical Insurance.
-Property Insurance.
-Liability Insurance
-Critical Illness and dread insurance.
 Life Insurance General
Insurance
• With life insurance we • General insurance -
don't renew our policy can provide
each year. Instead, we compensation only for
agree to pay a fixed the actual value of
premium for a set property. It cannot
number of years. cover the loss of
• In other words -we sentimental value
enter a long-term
commitment when we
buy a life insurance
policy.
 Life Insurance
It is a contract in which the insurer in
consideration of certain premium either in
lump sum or other periodical payments,
agrees to pay to the assured or to the person
for whose benefit the policy is taken, a stated
sum of money on the happening of a
particular event on the duration of human life.
 Features
• Elements of a valid contract.
• Insurable Interest.
• Utmost good faith.
• Assignment and Nomination.
• Premium.
• Return of Premium.
 Elements of a valid contract.

The life insurance contract is a valid contract

because there are the elements of agreement
like :
• Offer and acceptance.
• Capacity of parties.
• Free consent.
• Legal consideration
• Legal objectives.
 Insurable Interest.

In life insurance the insurable interest must

exist at the time of the contract of insurance.

 A person has unlimited insurable interest on

his/her life.
 A husband have inurable iterest in his wife's
life and vice versa.
 Utmost Good Faith
• The insured is bound to disclose all the
material facts and figures known to him but
unknown to the insurer.
• The insurer is bound to disclose about the
scope of the policy.
-In life insurance police the material facts are
age,income,education,occupation,health,famil
y size etc.
 Assignment and Nomination.
Assignment of a life insurance policy means
transferring the rights of the assured in
respect of the policy holder to the assignee.

In nomination, a person is merely named to

collect the amount to be paid by the insurance
company on the death of the assured.
 Premium.

• Premium is the price for the risk of loss

undertaken by the insurer.
• In life insurance premium paid in advance till
the policy matures.
• Premium is calculated on the average rate of
mortality.
 Return of Premium.

Premium is the consideration for the risk run

by the insurers. And if the risk insured against
is not run, then the consideration fails, the
policy does not attach, and as a consequence
the premium paid can be recovered from the
insured.
 Contingencies.
Principal Contingencies. Other Contingencies.

• Death. • Mortgage redemption.

• Surviving Too Long. • Children’s Education.

• Disability • Marriage of children.

 Benifits
• Participating/Non Participating
The policy which pay dividends/bonuses are called
Participating Policies. The policies which sold on
guaranteed benefits which do not varry is called non
participating policies.
• Loan.
It is the policy provision that permits the company
to the policy holder up to the assured value. It is a
source of liquidity.
 Surrender value.

The surrender value may be taken up after a

minimum period of 3 yrs.It provides a ready
source of cash to meet financial
requirements.
• Automatic premium loans.
It is the provision to protect the policy holder
against unintentional lapse, when premium
payment is overlooked due to temporary
inabilities to pay the premiums.
 Conversion option

This feature permits the insured to exchange

the term policies for whole life policies or
endowment insurance contract without any
evidence of insurability. Conversion takes
place within specified number of years of
issuance.
 Guaranteed Additions.

The insurance company agrees to refund the

money at a guaranteed amount per Rs 1000
face value per year for the life of contract.
• Loyalty Addition.
The Insurance Companies pay loyalty additions
on death after specified numbers of years from
the commencement of the policy or at maturity
of the policy provided it is in full force.
 Riders
Riders are the add ons that one can buy and
add the benefits to the basic insurance policy.

Why Riders?
1.Accidental Death Benefit.
2.Accelerated Death benefit.
3.Waiver of premiums.
Thank You