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1)
3) History of insurance
pure endowment
An endowment payable at the end of the policy period if the insured is alive. If the insured has died, there is
nothing paid in the form of benefits.
6) ulips
1.
A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that unlike a
pure insurance policy gives investors the benefits of both insurance and investment under a single integrated
plan.
2.
A Unit Link Insurance Plan is basically a combination of insurance as well as investment. A part of
the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested
in various equity and debt schemes. The money collected by the insurance provider is utilized to form a pool of
fund that is used to invest in various markets instruments (debt and equity) in varying proportions just the way it is
done for mutual funds. Policy holders have the option of selecting the type of funds (debt or equity) or a mix of
both based on their investment need and appetite. Just the way it is for mutual funds, ULIP policy holders are also
allotted units and each unit has a net asset value (NAV) that is declared on a daily basis. The NAV is the value
based on which the net rate of returns on ULIPs are determined. The NAV varies from one ULIP to another based
on market conditions and the funds performance.
7) What can be covered under fire insurance
Buildings Electrical installation in buildings Contents of buildings such as machinery, plant and
equipments, accessories, etc. Goods (raw materials, inprocess, semifinished, finished, packing
materials, etc.) in factories, godowns etc.. Goods in the open Furniture, fixture and fittings
Pipelines (including contents) located inside or outside the compound, etc.
STANDARD FIRE & SPECIAL PERILS POLICY COVERS
This policy is taken to insure a specified risk which could be any or all of the following building, furniture & fittings,
stocks, plant and machinery and any other other specified fixed assets.
PERILS COVERED
The major perils covered in a fire policy can be grouped as:Fire Perils
Fire.
Explosion / implosion.
Aircraft damage.
AOG perils.
Impact damage.
Bush fire.
lightning or cracks in a building due to a lightning strike. Both fire and other types of damages caused by lightning are
covered by the policy.
Explosion/Implosion:
Explosion is defined as a sudden, violent burst with a loud report. An explosion is caused inside a vessel when the
pressure within the vessel exceeds the atmospheric pressure acting externally on its surface. An explosion may cause fire
damage or concussion damage.
Implosion means bursting inward or collapse. This takes place when the external pressure exceeds the internal
pressure. This policy, however, does not cover destruction or damage caused to the boilers (other than domestic boilers),
economisers or other vessels in which steam is generated and machinery or apparatus subject to centrifugal force by its
own explosion/ implosion. These risks can be covered in a Boiler & Pressure Plant Insurance Policy, which is specially
designed to handle these risks.
AircraftDamage:
The loss or damage to the property (by fire or otherwise) directly caused by aircraft and other aerial devices and/ or
articles dropped there from is covered. However, destruction or damage resulting from pressure waves caused by aircraft
travelling at supersonic speed is excluded from the scope of the policy.
Riot,Strike,MaliciousandTerrorismDamage:
The act of any person taking part along with others in any disturbance of public peace (other than war, invasion,
mutiny, civil commotion etc.) is construed to be a riot, strike or a terrorist activity.
Any loss or physical damage to the property insured directly caused by such activity or by the action of any lawful
authorities in suppressing such disturbance or minimising its consequences is covered. Further the wilful act of any
striker or locked out worker, in connection with a strike or a lock out, or the action of any lawful authority in suppressing
such act, resulting in visible physical damage by external means, is also covered. Malicious act would mean an act with
malicious intent but excluding omission of any kind by any person, resulting in visible physical damage to the insured
property, whether or not the act is committed in the course of disturbance of public peace or not. Burglary,
housebreaking, theft or larceny does not constitute a malicious act for the purpose of this cover.
Total or partial cessation of work or the retarding or interruption or cessation of any process or operations; or,
permanent dispossession resulting from confiscation, commandeering, requisition or destruction by order of the
Government or any lawfully constituted authority; or permanent or temporary dispossession of any building or plant or
unit or machinery resulting from the unlawful occupation by any person of the same or prevention of access to the same,
are not covered.
Storm,Cyclone,Typhoon,Tempest,Hurricane,Tornado,FloodandInundation:
Storm, Cyclone, Typhoon, Tempest, Tornado and Hurricane are all various types of violent natural disturbances that
are accompanied by thunder or strong winds or heavy rainfall. Flood or Inundation occurs when the water rises to an
abnormal level. Flood or inundation should not only be understood in the common sense of the terms, i.e., flood in river
or lakes, but also accumulation of water due to choked drains would be deemed to be flood.
ImpactDamage:
Impact by any Rail/ Road vehicle or animal by direct contact with the insured property is covered. However, such
vehicles or animals should not belong to or owned by the insured or any occupier of the premises or their employees
while acting in the course of their employment.
* Subsidence and Landslide including Rockslide:
Destruction or damage caused by Subsidence of part of the site on which the property stands or Landslide/ Rockslide
is covered. While Subsidence means sinking of land or building to a lower level, Landslide means sliding down of land
usually on a hill.
However, normal cracking, settlement or bedding down of new structures; settlement or movement of made up
ground; coastal or river erosion; defective design or workmanship or use of defective materials; and demolition,
construction, structural alterations or repair of any property or ground-works or excavations, are not covered.
* Burstingand/oroverflowing of Water Tanks, Apparatus and Pipes:
Loss or damage to property by water or otherwise on account of bursting or accidental overflowing of water tanks,
apparatus and pipes is covered.
MissileTestingoperations:
Destruction or damage due to impact or otherwise from trajectory/ projectiles in connection with missile testing
operations by the Insured or anyone else, is covered.
LeakagefromAutomaticSprinklerInstallations:
Damage caused by water accidentally discharged or leaked out from automatic sprinkler installations in the insured's
premises is covered. However, such destruction or damage caused by repairs or alterations to the buildings or premises;
repairs removal or extension of the sprinkler installation; and defects in construction known to the insured, are not
covered.
Bush Fire:
This covers damage caused by burning, whether accidental or otherwise, of bush and jungles and the clearing of lands by
fire, but excluding destruction or damage caused by Forest Fire.
3)
Section 45 in the new Bill says no claim can be repudiated after three years of the policy being in force,
even if a fraud is detected, has sent life insurers into a tizzy.
According to Section 45 of the Insurance Act, 1938, no life insurance policy can be called into question
on grounds of mis-statement or wrong disclosure after two years of the policy coming into force.
However, if the insurer is able to prove that the claim was fraudulent, it need not be passed.
"No policy of life insurance shall, after the expiry of two years from the date on which it was effected, be
called into question by an insurer on the ground that a statement made in the proposal for
insurance...was inaccurate or false," says the Insurance Act. This is unless the insurer shows that such
statement was on a material matter and that the policyholder knew at the time of making it that the
statement was false.
Now, under the proposed Bill, this has undergone changes. Insurers said that in the new Bill, several
organised rackets of fraudsters would use the facility to defraud insurance companies. This would mean
the life insurer would have the onus of proving that the policy had been taken for false purposes and
this has to be done within three years of the policy being taken.
1. Nature of contract:
Nature of contract is a fundamental principle of insurance contract. An insurance contract comes
into existence when one party makes an offer or proposal of a contract and the other party accepts
the proposal.
A contract should be simple to be a valid contract. The person entering into a contract should
enter with his free consent.
2. Principal of utmost good faith:
Under this insurance contract both the parties should have faith over each other. As a client it is
the duty of the insured to disclose all the facts to the insurance company. Any fraud or
misrepresentation of facts can result into cancellation of the contract.
3. Principle of Insurable interest:
Under this principle of insurance, the insured must have interest in the subject matter of the
insurance. Absence of insurance makes the contract null and void. If there is no insurable interest,
an insurance company will not issue a policy.
An insurable interest must exist at the time of the purchase of the insurance. For example, a
creditor has an insurable interest in the life of a debtor, A person is considered to have an
unlimited interest in the life of their spouse etc.
4. Principle of indemnity:
Indemnity means security or compensation against loss or damage. The principle of indemnity is
such principle of insurance stating that an insured may not be compensated by the insurance
company in an amount exceeding the insureds economic loss.
In type of insurance the insured would be compensation with the amount equivalent to the actual
loss and not the amount exceeding the loss.
This is a regulatory principal. This principle is observed more strictly in property insurance than in
life insurance.
The purpose of this principle is to set back the insured to the same financial position that existed
before the loss or damage occurred.
5. Principal of subrogation:
The principle of subrogation enables the insured to claim the amount from the third party
responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of
loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the
insurance company will compensate your loss and will also sue the third party to recover the
money paid as claim.
6. Double insurance:
Double insurance denotes insurance of same subject matter with two different companies or with
the same company under two different policies. Insurance is possible in case of indemnity contract
like fire, marine and property insurance.
Double insurance policy is adopted where the financial position of the insurer is doubtful. The
insured cannot recover more than the actual loss and cannot claim the whole amount from both
the insurers.
7. Principle of proximate cause:
Proximate cause literally means the nearest cause or direct cause. This principle is applicable
when the loss is the result of two or more causes. The proximate cause means; the most dominant
and most effective cause of loss is considered. This principle is applicable when there are series of
causes of damage or loss.