Life insurance and general insurance fundamentals

Let’s discuss about insurance basics and evolution of insurance in India.

There are two main entities called insurer and insured/policyholder.An insurer is a company selling the insurance policy and an insured or policyholder is the person/company buying the insurance. The insurance premium is an amount to get sufficient coverage for policyholder.

India’s oldest insurance company is the National Insurance Company Ltd. which was founded in 1906. There are two more insurance companies 1) Life Insurance Corporation of India(LIC) 2) General Insurance Corporation of India(GIC).The GIC had four subsidiary companies 1) Oriental Insurance Company Limited 2) New India Assurance Company Limited 3) National Insurance Company Limited 4) United India Insurance Company Limited.

Since 1999, the government allowed private companies in the insurance sector. They also allows joint venture with FDI up to 26% with 75% stake of Indian companies.

There are two type of insurance in India 1) Life insurance 2) General insurance
Life insurance key features:
- The aim of policy is to cover life of a person with sufficient amount of coverage.
- There are many plans available in different categories like Term insurance plans, Endowment   plans, ULIP plans, Pension plans, Money back plans Whole life plans.
- The insurance premium will be eligible for tax benefits under section of 80C.
- The following companies offer such plans are
   Bajaj Allianz Life Insurance Company Limited .
   Birla Sun Life Insurance Co. Ltd
   ICICI Prudential Life Insurance Co. Ltd
   Life Insurance Corporation of India(Govt.)
   Max New York Life Insurance Co. Ltd
   Met Life India Insurance Company Ltd.
   Kotak Mahindra Old Mutual Life Insurance Limited
   SBI Life Insurance Co. Ltd
   Tata AIG Life Insurance Company Limited
   Reliance Life Insurance Company Limited.
   Aviva Life Insurance Company India Limited
   Sahara India Life Insurance Co, Ltd.
   Shriram Life Insurance Co, Ltd.
   Bharti AXA Life Insurance Company Ltd.
   Future Generali India Life Insurance Company Limited
   Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.
   DLF Pramerica Life Insurance Co. Ltd.
   Star Union Dai-ichi Life Insurance Co. Ltd.
   IndiaFirst Life Insurance Company Ltd.

General Insurance key features:
- The aim of policy is to cover non life related product with sufficient of coverage .
- The categories look like motor policy, householders policy, personal accident, critical illness, mediclaim policy.
- The most of the policies do not offer tax benefits except mediclaim policy in section 80D.
The following companies offer such plans are
  Oriental Insurance Company Limited(Govt.)
  New India Assurance Company Limited(Govt.)
  National Insurance Company Limited(Govt.)
  United India Insurance Company Limited(Govt.)
  Tata AIG general insurance
  Royal Insurance and many more

Important Statistics: The two million (0.2%) people of India are insured under Mediclaim.LIC holds more than 55% stake in policy holding in India which has 1.2 million agents serving all over India.

More details:
The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, with Mission "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."

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