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by life insurance, general insurance

Life is full of twists and turns, which come unexpectedly. One can believe or take anything for granted in his or her life. A life insurance policy is a measures against the uncertainties of life. The life insurance policy can be defined as a legally binding system by which the losses suffered by few people are spread over many, who are exposed to similar risks. It is a protection against financial loss, which arises on the happening of unexpected events or crises. Therefore a life insurance policy helps in mitigating risks. It also provides financial help against adverse financial burdens taken by the victim. Life insurance policies cover various risks of life including other assets and valuables such as you sweet home, automobiles, jewelry, business and lots more.

It is a true fact that life is very delicate as we cannot control the uncertainties of life. But, with the help of life insurance policies we can plan to manage the risks surrounding us. Life insurance covers the financial risks which arise due to the early or premature demise of the bread earner. It protects the insurer from the contingencies that could affect him or her. Life insurance for instance is not for the person who passes away; it is for those who survive i.e. his or her family.

Therefore, it is the responsibility of every bread earner to take the safety against the events that could harm or affect his or her family in the unfortunate circumstance. The life insurance policy is very vital for every person, as it secures the family members on the ground of monetary grounds.

It is important to know about various types of life insurance policies before opting for one. An endowment policy covers risk for a specified tenure. At the end of which the sum assured is paid back to the insurer, along with the bonus accrued during the term of the policy. An endowment life insurance policy is primarily designed to provide a living benefit. Secondly, it also provides life insurance protection to the policy holder. Therefore, it can be said that it is more of an investment rather than a whole life policy.

Money back policy is other type of the insurance policy. This policy provides periodic payments of partial survival benefits during the term of the policy, as long as the insurer is alive. This policy differs from the endowment policy, as the endowment policy survival benefits are payable only at the end of the endowment period. An vital feature of money back policies is that the family members get full sum assured without deducting any of the survival benefit amounts, as it may have already been paid as money-back components.

In India, the life insurance is the fastest growing sector especially when the Government allowed Private players and FDI up to 26%. Before 2000, the Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC). The LIC enjoyed monopoly by taking over the private life insurance companies.

The Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in this field. Among the giant private sector players ICICI Prudential Life Insurance (Joint Venture between ICICI Bank and Prudential PLC) is the largest. It is followed by Bajaj Allianz Life Insurance Company Limited (Joint Venture between Bajaj Group and Allianz).

While keeping its customers in the mind, the private companies have come up with better products to help them in better way. Among such products- the ULIPs or the Unit Linked Investment Plans offer both life cover and scope for savings or investment options as per the customer desires. Furthermore, these type of plans are subject to a minimum period of three years to prevent any sort of misuse of the tax saving insurance policy which are offered to such plans under the Income Tax Act.

As a matter of fact, the all life insurance companies in India have to comply with the strict regulations laid out by apex body Insurance Regulatory and Development Authority of India (IRDA). Therefore there is least risk associated with private insurance players.

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