Insurance

Insurance Companies are financial

intermediaries engaged in collecting
savings and channelising them into
Government & other sectors of the
economy.
In India, Insurance companies operate in
the area of life, health and general.
In Life Insurance, the claim is fixed and
certain but in General Insurance the
amount of claim can be ascertained only
after the event eg. Fire, theft etc.

Insurance
LIC was set up in 1956, following the
nationalization and amalgamation of 245
companies.
Life Insurance is a contract payment of a
sum of money to the person assured on the
happening of the event insured against.
Thus it is concerned with premature deaths
leaving a dependent family to fend for
himself.
That of people living to old age without
visible means of support.

Objectives of Life Insurance

1. To spread it widely and in particular to the rural areas and to the socially and
economically backward sections.
2. Maximise mobilisation of peoples savings by making insurance linked savings
adequately attractive.
3. In the investment of funds, the primary obligation to its policy holders is to
deploy the funds keeping in view the national priorities as well as offering
attractive return.
4. Conduct business with utmost economy with the full realisation that the money
belongs to the money holders.
5. Acts as trustees of the insured public in their individual and collective capacities.
6. Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
7. Provide efficient service with courtesy by involving all people working in the
corporation.
8. Promote amongst all agents and employees of the corporation a sense of
participation, pride and job satisfaction through discharge of their duties
towards the achievement of corporate objective.

Features of Life Insurance

Protection: Life Insurance gives full protection

against risk of death of the saver.
Aid to thrift: It encourages Thrift. Savings can be
made in a painless manner.
Liquidity: Loans can be raised on the sole security
of a policy which has acquired loan value.
Tax Relief: It also provides tax relief in Income Tax
and wealth tax.
Money when you need it: Insurance plans makes
provision for cash needs such as childrens
education, marriage etc.

Types of Life Insurance

Insurance For Women: Prior to nationalization (1956), many of
the private Insurance companies used to offer insurance to
female lives with some extra premium or on restrictive
conditions. But after nationalization it has changed. At present
women with earned income are treated on par with male lives.
Medical and Non-Medical Schemes: Life Insurance is normally
offered after a medical examination of the life to be assured. But
lately ,LIC has been extending insurance cover without any
medical examination, subject to certain conditions.
With Profit and Without Profit Plans: In the former bonus
disclosed are allocated to the policy & are payable along with
the contracted amount. The premium rate charged is higher
here. In without profit plan the contracted amount is paid
without any addition.
Keyman Insurance: This is taken by a business firm on the life of
key employees to protect the firm against the financial loss
which may occur due to the premature demise of the keyman.

Life Insurance

Functions:
1. It provides life insurance cover to the policy
holders at low cost.
2. It extends social security to weaker sections of
the society through its group insurance plans.
3. It invests funds in Central & State Government
Securities.
4. It extends assistance to develop infrastructure
facilities like housing , water supply etc.
5. It provides financial assistance to the
corporates by way of term loans.

General Insurance Corporation of India

The Government of India in 1972, nationalized the

General Insurance Business & the 107 companies
providing general insurance were ammalgamated &
grouped into 4 operating companies viz:
1. New India Assurance Company Ltd. H.O.MumbaI
2. Oriental Insurance Company Limited- H.O. New
Delhi
3. National Insurance Company Limited H.O.Kolkata
4. United India Insurance Company LimitedH.O.Chennai.
GIC is the only company transacting Non-life Insurance
Business in India through its four subsidiaries.
GIC is responsible for supervising, controlling & coordinating the business of General Insurance.

Insurance

Objectives of General Insurance Corporation

of India
1. To provide need based & low cost general
insurance cover to the rural population,
2. To administer a crop insurance scheme for
the benefit of farmers.
3. To develop & introduce covers with social
security benefits.
4. To develop a marketing network throughout
the country including areas with low
premium potential & to promote balanced
regional development.

Functions of GIC
1.
2.
3.
4.

Insurance
Assistance to Corporate Sector
Investment of Funds
Other Activities