PRINCIPLES OF INSURANCE

In continuation to Basics of Insurance Planning regarding what is Insurance and history of insurance, let’s now know the principles applicable to Insurance.

A contract of insurance is a mercantile contract. All the principles which are applicable to mercantile contracts are applicable to contracts of insurance. In addition to this, there are special principles applicable to contracts of insurance.

Special Principles of Insurance are as follows,

1. Insurable Interest

“Ownership should be there to evaluate financial (insurable) interest”

Insurable Interest is must for validating the contract of insurance. Insurable interest must be a financial / pecuniary interest. A person is said to have insurable interest in a property when he enjoys benefit from its existence and suffers by its destruction or loss.

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Why do we need Insurance Planning ?

CAN YOU BE SURE AS TO WHAT MAY HAPPEN TO “U” IN THE NEXT FEW MINUTES???...

DO YOU WANT TO BE FINANCIALLY SECURE IN THE EVENT OF ANY UNFORESEEN CALAMITY???...

As you know like this Life is full of uncertainties & unpredictable events, so insurance is needed to provide peace 0f mind for you;

The following Insurance benefits will provide you some idea on why do you need Insurance Planning in present situation. Need for Insurance Planning can be segregated as & known by

1) Common Insurance Benefits; 2) Life Insurance Benefits and 3) General Insurance Benefits

Common Insurance Benefits

     #      Provides the much required UNAVOIDABLE RISK COVER for us;

     #      Providing replacement income for your dependents on any unforeseen events

     #      You can’t find any parallel substitute in the financial world for the risk cover that is provided by insurance

     #      Money back plans provide risk cover & liquidity as it returns a portion of the sum assured at regular intervals to us.

    #      Unit linked plans combines market linked high risk returns along with risk cover

    #      To protect ourselves and family from financial risk

Life Insurance Benefits

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History of Insurance

Next to understand after Insurance basic knowledge is Stages of Insurance history in crisp.

    #      It started from Lloyd’s coffee house London

    #      First policy issued in England in 1583

    #      It had its origins in the early 19th century with the arrival of British enterprise in India.

    #      The insurance sector in India dates back to 1818 when first insurance company, The Oriental Life Insurance Company, was established, at Calcutta.

    #      LIC of India formed in 1956 after nationalization of life insurance Business of 245 private (Indian and Foreign) insurance companies

    #      The Life Insurance Corporation of India (LIC) came into existence by an Act of Parliament, viz. LIC act, 1956, with a capital contribution of Rs.5 Crores from the Government of India

    #      The General Insurance Business (Non-Life) in India started with the establishment of Triton Insurance Company Limited in 1850 at Calcutta by the British.

    #      General insurance business of 107 insurance companies was amalgamated and nationalized in 1972 & four public sector General Insurance Companies were formed namely, the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd.

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What is Insurance ?

Insurance

"To understand and implement proper Insurance Planning, you should be able to grasp the following in the upcoming posts - WHAT IS INSURANCE, HISTORY OF INSURANCE and PRINCIPLES OF INSURANCE".

Insurance is based on principles of co-operation. The losses suffered by a few are spread over and shared by many. For example, collecting insurance premium from many people and sharing the loss with one person.

Insurance is protection against possible financial loss arising on the happening of an unexpected circumstance; it gives you peace of mind;

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What is Insurance Planning?

Let us see what is Insurance Planning in Layman meaning:

# Insurance Planning, in simple terms, is nothing but managing the risk by planning to deal with contingencies and unforeseen events to help out our family's future.

# Proper Insurance Planning can help you to compare and evaluate various options with regard to different insurance companies & insurance products for

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