DEFINITION Life insurance is the business effecting contracts of insurance upon human life including any contracts whereby the payment of money is assured on death except death by accident on the happening of any contingency dependent on human life and any contract which is subject to the payme ID: 485340
Download Presentation The PPT/PDF document "Life insurance" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Life insuranceSlide2
DEFINITION
Life insurance is the business effecting contracts of insurance upon human life including any contracts whereby the payment of money is assured on death except death by accident on the happening of any contingency dependent on human life and any contract which is subject to the payment of premium for a term dependent on human life. Slide3
CharacterIstics of Life Insurance :-
Outcome of contract
Payment of premium
Payment of sum assured
Insurable interest
Not a contract of indemnity
Related risks to life
Financial help
Encouraging savingsSlide4
Nature of Life Insurance:-
1) Economic nature of life insurance:-
A family need food, shelter, clothing are met out of the current income.
The current income of everybody depend upon the earning they make.
A person may reach an age when he can’t earn.Slide5
The insured savings will help in meeting the necessaries.
Money received against the insurance policy also provide a source of income.Slide6
2) Legal Nature of Life Insurance
As per
L
ife Insurance Act, Life Insurance is the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is insured on death or the happening of any contingent dependent on human life and any contract which is subject to the payment of premium for a term dependent on human life.Slide7
Procedure for Taking Life Insurance:-
Filling of proposal form
Proof of age
Medical examination
Agents report
Acceptance of proposal
Payment of premium
Issue of policy Slide8
Uses of Life Insurance
Provides protection for family
Encourages savings
Provides channels for investment
Eliminates dependency
Help in capital formation
Loans against policy
Provides liquidity
Helpful for partnership concernSlide9
Nature of General C
ontracts:-
Agreement
Competency of the parties
Free consent of the parties
Legal consideration
Legal objectSlide10
Insurable Interest:-
Insurable interest in own’s life
Insurable interest in other’s life
proof not required
Proof requiredSlide11
When proof not required :-
In the following cases, no proof is required:
Husband has insurable interest in the life of wife
Wife has insurable interest in the life of husbandSlide12
When proof is required:-
In the following cases, proof is required:
Business relationship:
Creditor in the life debtors
Partners has insurable interest in the life of each partner
Employee has interest in the life of key-man
Surety has insurable interest in the life of principle
2) Family relationshipSlide13
General Rules for Insurable Interest
Time of insurable interest
Insurable interest must be valuable
Services
Insurable interest should be valid
Legal responsibility may from the basis of insurable interest
Insurable interest must be definite
Legal consequencesSlide14
Principal of Utmost Good Faith
Life insurance required that the principal of utmost good faith should be preserved by both the parties to the contract, insurer and insured. Both the parties must be of same mind and disclose all the material fact affecting risk to each other.Slide15
WARRANTIES
The representations which are contain by the policies, expressly or implicitly forming the part of the contract is non as warranties.
Two types of warranties are-
Informatory
Promissory Slide16
Proximate Cause
The efficient or effective cause which causes the loss is called proximate cause.
The doctrine of proximate cause is not applicable in life insurance cases except the following –
War risk
Suicide
Accident benefitSlide17
Return of Premium
Generally, the premium paid is not returned but in the following cases, premium is returned-
For reason of equity
By agreement in the policy Slide18
Other Features
Alcatory contract
Unilateral contract
Conditional contract
Contract of adhesion
Indemnity contract is not applied
Loan against policy
Provide liquidity
Tax concernSlide19
Thank you