Insurance & Its Types: Life Insurance, General Insurance; Classification of Risks; IRDA Commerce YouTube Lecture Handouts Part 1

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Insurance & Its Types: Life Insurance, General Insurance; Classification of Risks; IRDA

Insurance Industry in India

  • First Insurance Company established in 1818 - Oriental Life Insurance Company to cater to the needs of European community.
  • In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.
  • In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business.
  • The oldest existing insurance company in India is the National Insurance Company, which was founded in 1906, and is still in business.
  • The Government of India issued an Ordinance on 19 January 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year.
  • In 1972 with the General Insurance Business (Nationalization) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1 January 1973.
  • 107 insurers were amalgamated and grouped into four companies, namely which were formed under GIC
    • National Insurance Company Ltd
    • New India Assurance Company Ltd
    • Oriental Insurance Company Ltd
    • United India Insurance Company Ltd
  • GIC had four subsidiary companies.
    • Oriental Insurance Company Limited,
    • New India Assurance Company Limited,
    • National Insurance Company Limited
    • United India Insurance Company
  • With effect from December 2000, these subsidiaries have been de-linked from the parent company and were set up as independent insurance companies
  • The FDI limit in the insurance sector has been raised to 74 percent according to the 2021 union budget.
  • The prime minister of India announced an insurance repository system, helping policyholders buy and maintain insurance policies in electronic form rather than on paper.
  • Insurance repositories, like share depositories or mutual fund transfer agencies, will hold electronic records of insurance policies issued to individuals as electronic policies or e-policies.

Life Insurance

  • The insurance company promises to compensate the insured individual for uncertainties of life that are death
  • Life insurance provides protection against life risk.
  • Life insurance is not a contract of indemnity. It is considered as an investment
  • Benefits under the policy are paid on the occurrence of an insured event or on maturity
  • Long-term contract

General Insurance

  • The insurance company promises to compensate the insured individual or entity for the financial loss or damage caused due to an unfortunate event
  • General insurance gives protection for all the valuable things that are important to you
  • General insurance is a contract of indemnity
  • Short-term contract
  • Financial loss caused due to the insured event is remembered on the occurrence of the particular event
  • Short-term contract

Life Insurance

  • Whole life
  • Term life
  • Universal life
  • Variable Universal life
  • Money-back policies
  • Unit-linked investment policies (ULIP)
  • Pension policies
  • Endowment plans
  • Accident cover

General/Non-Life

  • Motor insurance
  • Health insurance
  • Commercial insurance
  • Travel insurance
  • Property insurance
  • Mobile insurance
  • Marine insurance
  • Heavy Machines insurance

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