WHATS A LIFE INSURANCE REALLY MEANS-
Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner (or policy payer) agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. In the United States, the predominant form simply specifies a lump sum to be paid on the insured's demise.
As with most insurance policies, life insurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon life (or lives) of the people named in the policy.
Insured events that may be covered include:
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; for example claims relating to suicide, fraud, war, riot and civil commotion.
Life based contracts tend to fall into two major categories:
India is emerging as one of the two of the largest
markets in the world for life insurance products, the other being China. In the
case of India, the three key drivers of growth are a large insurable
population, a high savings rate, roughly at about 25 per cent and a low
penetration, at a mere 2.3 per cent. In the 11 months of fiscal year 2004-05,
life insurance companies collected premia worth Rs 172 billion and the market
grew by a whopping 32.4 per cent during the year. Of this, the public sector
Life Insurance Corporation (LIC) had the lion's share of the market with premia
totaling Rs 134 billion. Private sector players recorded a spectacular growth of
129 per cent over the last year, compared to LIC's growth of 18 per cent.
India's GDP growth rate of 6 per cent per annum holds great potential for the
sector. According to one estimate real life premia are expected to grow at a
compounded annual rate of 15 per cent over the next ten years.