PRESENTED BY THE 8 ENERGIZERS: SR.N NAME ROLL O NO 1 DIPIN MANANI 27 2 JASVEER AILSINGHANI 03 3 MANJU KUKREJA 21 4 NARAIAN TE K!

ANI 42 " BHAVNA RAMNANI 3# # DEEPA GEHANI 11 7 SAPNA KUKREJA 22 8 BHAVNA VAN!ANI 44

A$%&'()*+,*-*&.

We would like to thank Prof. Kajal for giving a wonderful opportunity to work on a such fine aspect of life and business and also we would like to thank all the people that have lead to completion of this project. All the group members and please excuse us if we forget to mention anyone. This project had helped us to understand the importance of insurance in our day to day social as well as economic life. n this project we have tried to present more clear and precise image of need and importance of insurance.

Thanking !ou.

!/0. 12 I&2340&$*
The "usiness of nsurance is related to the protection of the economic values of assets. The assets would have been created through the efforts of the owner. The asset is valuable to the owner# because he expects to get some benefit from it. The benefit may be income or something else$ it is a benefit because it meets some of his needs. nsurance is defined as a co%operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to insure themselves against the risk. &isk is uncertainty of a financial loss. 'very risk involves the lose of one or other kind. The function of insurance is to spread the loss over a large number of persons who are agreed to co%operate each other at the time of loss. They are agreed to share the loss because the chances of loss# i.e. the time# amount# to a person who are not known. The insurance is also defined as a social device to accumulate funds to meet the uncertain losses arising through a certain risk to a person insured against the risk.

DE5INITION O5 INSURAN E
Insurance is a co operative device to spread the loss caused by particular risk over a number of persons, who are exposed to at and who agreed to insure themselves against the risk. Thus, the insurance is a co operative device to spread the risk and also the method to provide security against losses to the insured.

5UN TIONS O5 INSURAN E

The (unctions of insurance can be studied into two parts)% Primary (unctions *econdary (unctions

P41-046 53&$.1'&2:7
nsurance provides +ertainty of payment at the uncertainty of loss. The uncertainty of the loss can be reduced by the better planning and the administration there are different types of uncertainty in a risk. The risk will occur or not# when will occur# how much loss will be there, n other words# there is uncertainty of happening of time and amount of loss insurance removes all these uncertainties and the assured is given certainty of payment of loss. The insurer charges premium for said certainty. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot check the happenings of the risk but can provide the losses at the happening of the risk. The risk is uncertain# and therefore# the loss arising from the risk is also uncertain. When risk takes place# the loss is shared by all the persons who are exposed to the risk.

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The insurance joints hands with those executions which are engaged in preventing the losses of the society because the reduction in loss causes lesser payment to the assured and so more savings is possible which will assist in reducing the premium. *o again premium is reduced to# which will stimulate more business and more protection to the masses.

Therefore# the insurance assist financially to the health organi-ation# fire brigade# educational institution and other organi-ation which are engaged in preventing the losses of the masses from the death or damage. The insurance provides capital to the society. The accumulated funds are invested in productive channel. The industry# the business and the individual are benefited by the investments and loans of insurers. The insurers eliminate worries and miseries of losses at death and destruction of property. t improves not only his efficiency but the efficiency is of masses are also advanced.

ORIGIN O5 INSURAN E

The concept of insurance rose with the steam of coffee houses in the ./th century. *hip owners wanted to insure their ships and cargo against loss at sea. The concept was to spread the chance of financial loss among a large number. n .012 "enjamin (ranklin launched the Philadelphia +ontribution ship for the nsurance of 3ouses from 4oss by (ire. "We can't save the sinking ship, but we can help keep the company from going under with it."

IMPORTAN E O5 INSURAN E: 7
5ainly the importance of insurance is divided in three categories) IMPORTANCE OF INSURANCE

TO INDIVIDUAL

TO BUSINESS

TO SOCIETY

EXPLANATION: -

TOWARDS INDIVIDUAL) %
.. Provides safety 6 security) % nsurance provides safety and security against loss on a particular extent. n other words security against premature date 6 old age sufferings are provided by life insurance. *imilarly# security against loss by fire is provided in fire insurance. 2. nsurance offers peace of mind) % The security wish is the prime motivating factor. The occurrence of any event like fire# accident# damage or death may frustrate or depress human mind. nsurance offers peace of mind to the human being by compensating the loss. /. nsurance protects mortgage property) % At the death of the owner of the mortgage property# the property is taken over by the lender of the money 6 the family will be deprived of the use of the property then insurance will provide ade7uate amount to the dependence of the disease. *o that the money is to be paid to the lender 6 the mortgage property is relieved. 8. nsurance eliminates dependency) % At the death of the father or the husband there is destruction in the family. The family would suffer a lot. t brings reduced standard of living 6 the sufferings may go to the extent of borrowing from relatives# friends or the neighbors. The economic ndependence of the family is reduced. The insurance is here to assist them 6 provide sufficient money at the time of suffering. 3ence insurance eliminates dependency.

1. 4ife insurance encourages savings) % The elements of protection and investments are present only in case of life insurance. "y life insurance systematic savings is possible because regular premiums are re7uired to be compulsorily paid and the insurance premium can not be withdrawn easily before the expiry of the term of the policy. f the premium is fails to pay within the grace period# then the policy may be on cancellation 6 the person may get back only a very nominal portion of the total premium paid on the policy. 9. 4ife insurance provides profitable investment) % n ndia the insurance policy carries special exemptions from income tax# wealth tax# gift tax 6 state duty i.e. the premium paid on life insurance is exempted under section :; < of the income tax 6 the gift of the insurance policy is also exempted under <ift Tax Act.

TOWARDS BUSINESS) %
.. =ncertainty of the business losses is reduced) % The methods like negligence are softness. The property may be turn to ashes. The new construction and the new establishment are possible only with the help of insurance. 3ence# insurance reduces the uncertainty of the business losses. 2. "usiness efficiency will increase with insurance) % When the owner of the business is free from the botherations of the losses then he will be certainly devote much more time to business. The carefree owner work better for the maximi-ation of profits. /. Key%man indemnification) % Key%man is that particular person who>s experience expertise capital# energy 6 ability to control. <oodwill 6 loyalty makes in the most valuable asset in the business 6 whose absence will reduce the income of the employer tremendously 6 upon to that time when such en7uiry is not substituted. The death or disability of such valuable lives will prove a more serious loss then that by fire. The potential loss to be suffered 6 the compensation to the dependence of such employee re7uire an ade7uate provision which is made by purchasing ade7uate life insurance policies. 8. 'nhancement of credit) %

The business can obtain loan by pledging the policy as security for loan. The insured persons are getting more loans due to certainty of the payment at their death. f the borrower is unwilling to repay the loan 6 interest# the lender can surrender the policy 6 get the amount of loan 6 interest thereof. 1. "usiness contamination) % The partnership business# the business may continue at the death of the any of the partner although the serving partners can restart the business. "ut in both the cases business and the partners both will suffer economically. The insurance companies provide sufficient fund at he time of the death so as to continue the business. n partnership firm each partner may be insured for the amount of his interest in the partnership and his dependence may get the amount at the death of the partner. 9. Welfare of the employees) % The welfare of the employees is the responsibility of the employer. The employees are working for the employer therefore$ the employer has to look after the welfare of the employees which can be the provision for early death 6 provision for disability and old age. These re7uirements can easily be fulfilled by the life insurance which is generally provided by the group of insurance.? the premium is generally paid by the employer.

TOWARDS SOCIETY) %
.. Wealth of the society is protected) % 4oss of the particular will can be re protect it with insurance. 'ach and every human being will have financial security against old age# damages# death 6 wealth including the life. The present# future 6 potential human 6 property resources are well protected. The happiness and prosperity are observed with the help of insurance. 2. Provides economic growth of the country) % nsurance encourages the savings and by the savings there is capital formation. With the capital formation there is economic growth in the country. /. Provides infrastructural facilities) %

The funds collected by the insurance company by the way of premium or investment in the government. *ecurities and the fund invested in the government securities provide infrastructural facilities.

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Sharing Of Ris : -

nsurance is the device to share the financial losses# which might be# fall on an individual or his family on the happening of specific event. The loss arising from these events are shared by all the insured in the firm of premium. C!-O"#ra$i%# D#%i&#: +o%operation of large no. of persons who in effect agrees to share the financial loss arising due to particular risk which is insured.

*uch a group of persons may be brought voluntarily or through publicity or through agents. E%a'(a$i!n Of Ris : The risk is evaluated before insuring to charge the amount of share of an insured herein called premium. +onsidering the age# occupation# health etc. Pa)*#n$ Is Ma+# A$ C!n$ing#n&): -

The payment for compensation is made on certain contingencies. n case of life insurance contract# the contract is of certain because the date is certain but the time of death is uncertain or the compensation at the expiry of the term of insurance which will certainly occur. 3ence the payment is certain. n other

insurance contract the contingency is the fire.

n case of fire

insurance which may or may not occur during the period of

insurance, *o if the contingencies occur the payment is made otherwise no amount is given to the policyholder. Ins(ran&# Is N!$ A ,a*-'ing: -

nsurance offers the only sure method of charging compensation or changing those uncertainties into certainties. (ailure of insurance amount into gambling. f a person does not get his property or life# insured is gambling with his life. 3ence insurance is not a gambling. Ins(ran&# Is N!$ A Chari$): As charity is given without consideration but insurance is not possible without premium. nsurance provide security 6 safety to individual 6 to society. 3ence compensation paid in case of loss against the consideration in the form of premium is not the charity.

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./0 Lif# Ins(ran&#: -

Life Insurance is a contract or agreement by which insurance company agrees to pay in returns premiums or lump sum premium, an agreed amount of money at the time of death or maturity of policy whichever is earlier.

4ife insurance is the latest 6 popular type of nsurance. n ndia the business of 4ife nsurance is conducted by 4ife nsurance +orporation of ndia# which is an example of statutory company. This 4ife nsurance is based on 2 principles i.e. utmost good faith 6 insurable interest. 4ife nsurance is not a contract of indemnity. t is contract for the payment of a specific amount# as the value of human life cannot be measured in terms of money. 1/0 S!&ia' Ins(ran&#: The social insurance is to provide protection to the weaker sec of the society who are unable to pay the premium ade7uate insurance. Pension plans# disability benefits#

unemployment benefits# sickness insurance 6 industrial insurance are the various forms of social insurance.

With the increase of socialistic ideas# the social insurance is the obligatory duty of the nation. The government of the country must provide social insurance to its masses.

2/0 ,#n#ra' Ins(ran&#: The gen. nsurance includes property insurance# liability

insurance 6 other forms of insurance. (ire 6 marine insurance are strictly Property nsurance. 5otor# theft# fidelity and machine insurance include the extent of liability insurance to a certain extent. Pr!"#r$) Ins(ran&#: =nder the Property nsurance of a person are insured against the certain specified risk. This risk may be fire or marine perils# theft or property of goods# damage to property at accident.

5arine nsurance) % 5arine insurance is the oldest type of the nsurance and plays a imp. &ole in the foreign trade which is conducted by way of water transport. 5arine nsurance is the contract under which nsurance +@. Agrees to pay the compensation against the loss due to perils of the sea. t is the type of the general insurance which covers the risk generally up to one year# on which the premium is

paid in the advance. t is divided into / types i.e. 3ull# +argo# (reight nsurance.

Fir# Ins(ran&#: (ire insurance is the form of the general insurance providing protection against risk of loss due to fire. t is contract of indemnity. The nsurance +@. undertakes to make good the loss arising due to fire. The claim should satisfy 2 conditions. (irstly there must be loss due to actual fire# secondly the fire should be accidental. The fundamentals principals are utmost good faith# insurable interest# indemnity 6 subrogation are the basis of fire insurance. The fire insurance policy is usually of shot duration i.e. one year. The premium is usually paid in one installment in advance.

Mis&#''an#!(s Ins(ran&#: The property# goods# machine# furniture# automobile# valuable

articles etc# can be insured against the damage or destruction due to accident or disappearance due to theft. There are different forms of insurance for each type of said property whereby not only property insurance exits but liability insurance 6 personal injuries are also insured. O$h#r F!r*s: -

"eside the property 6 liability insurances there are certain other insurances which are included under general insurances. The examples of such insurances are export%credit insurances# state employees insurance etc# whereby the insurer guarantees to pay amount at certain events.

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As the word it is self explanatory insurance means to be insured about some uncertainty. This is the biggest advantage of insurance# i.e# to cover the risk of uncertainties.

LIFE INSURANCE :4ife insurance policy covers the risk of life. n this case if the insured person meets with an accident or dies# the company pays compensation to the family members or any other nominee. f in any case the insured dies in an accident he is liable for claim of double the amount of policy. n different policies there are different advantages. n some policies if the insured person dies his family members get the insured amount# which acts as a source of income for the family. n some policies the company gives loans against the security of life insurance policy. n some policies the company gives interest on paid up value# this covers risk and also income for the individual. The government has made a provision that to grant 2; A rebate on income tax to the individual who has invested in life insurance. VE3ICLE INSURANCE )% Behicle insurance covers the risk of accident or mishaps related to vehicle. n vehicle insurance there are two types of policies# vi-# (irst party and Third party. n (irst party insurance

policy# if any accident takes place both the parties involved in accident are liable for the claim of their loses. f any vehicle is damaged due to accident the insurance company compensates for the spares as well as repairs expenses. t also covers risk of theft and fire of the vehicle. n these cases the company charges depreciation of the vehicle and pays the claim amount. "ut in case of third party insurance no claim can be made by the party due to whom the accident took place# the insurance company only accepts the claim of the third party which is affected due to accident. FIRE INSURANCE :(ire insurance covers the risk arising out of fire ha-ards. This insurance is mainly helpful to the businessmen who have to insure their properties like raw materials# finished goods in godown and factory machineries. n manufacturing and stocking process there are chances of fire mishaps and these processes occupy the key role in capital. *o to cover the risk of assets against fire which helps the businessman to conduct trade smoothly as the amount of goods destroyed by fire is reimbursed by insurance company as per the terms and conditions of insurance policy.

 MARINE INSURANCE:5arine insurance covers the risk of accidents which take place while the transportation of machinery and goods is done through water%ways. t helps in covering the risk of sea perils. The uncertainty of storms and weather changes is covered through marine insurance. "usiness goes without being interrupted upto some extent due to risk being covered.

DIS ADVANTAGES O5 INSURAN E

According to Behicle nsurance Act# .C:: there is no provision for double insurance. ..D 2.D /.D 8.D 1.D 5any times bogus claims are made due to which many companies are running in losses. (ire insurance claims sometimes take long durations to sanction. 'lderly people cannot apply for life insurance policy. (ire insurance and marine insurance policies cannot be terminated. 5any legal proceedings are involved in fire and marine policies even slight changes in stock or any other changes need to inform to insurance companies. 9.D 0.D (ire and marine insurance policies are for a very short period. f we surrender to life insurance policy then large amount of money is deducted.

H'( D'*2 L18* I&2340&$* !'4%;

!ou get life insurance by buying a policy Ea contractD. When you do so# you join a risk sharing group. The company promises to pay# at the time of your death# a sum of money to the person or persons selected by you Ethe beneficiariesD# who are named in the policy. This promise is given in return for your agreement to pay a sum of money Ethe premiumD to the company over a specified period of time. The principle governing life insurance is easy to understand. t is possible to determine approximately how long a group of people will live. (or example# the average lifespan of a group of /0%year%old men who are non%smokers# who exercise regularly# arenFt overweight and whose parents and grandparents lived normal life spans# can be foretold with reasonable accuracy. 5athematicians cannot tell when a specific person in the group will die# but they can estimate the approximate number of people who are likely to die the first year# the next year and so on# until the last of that generation. nsurers gather information about applicants %% such as age# gender# health# occupation and hobbies %% so that they can group together people with similar characteristics and calculate a premium based on the groupFs level of risk. Those with similar risks pay the same premiums. This process is known as risk classification or underwriting# and by providing e7ual treatment for e7ual risks# it allows insurers to treat all policyholders fairly. 4ife insurance companies gather the information they use to determine premium levels by having potential policyholders complete an application. =nderstandably# insurance applicants and policyholders have concerns about the confidentiality of medical and other personal information given to insurers. The insurance industry has a long history of safeguarding sensitive information# such as evidence of chemical dependency or alcoholism# or cancer or some other life%threatening condition. This respect for personal privacy and medical confidentiality extends both to people applying for insurance and to policyholders.

PRO EDURE INVOLVE IN INSURAN E POLI Y

LAIMING THE

(ollowing are some of the important issues to be borne in mind while filing a death claim. .. @riginal policy documents A policy document is issued when one buys life insurance. This is the most important document related to life insurance. t acts as proof of purchase# just like any receipt or challan does for goods bought. t is imperative for individuals to preserve this document very carefully to file claims Eon death or maturityD at a later stage. Alongwith this document# other related documents like assignment deeds and nomination deeds will also have to be submitted at the time of filing the claim. 2. Age proof Proof of age also needs to be submitted to the insurance company while filing a claim. Age proof is generally asked for at the time of issuing a policy document and filed in the company>s records$ but just in case it hasn>t been done# it will be before the claim is disbursed. /. Geath certificate The insurance company will ask for the death certificate of the deceased. This acts as conclusive evidence that the individual has indeed ceased to survive and that the life insurance cover has now fallen due. 8. (illing the claim form n case of a non%early death claim# the nominees have to fill claim form no. /0:/A. 1. 4egal proof of the titleholder n cases where the person# who has laid claim to the settlement amount# is not an assignee or a nominee# he will have to submit legal evidence of the title to the claim amount. n cases where the claim is an early death claim# in addition to the above# the following procedures will be followed) 'n7uiry

An en7uiry will be conducted to probe into the reasons of demise. This is a standard procedure followed by all life insurance companies just to make sure that the demise occurred under natural circumstances and that there was no foul play involved. The insurance company will not entertain suicide cases within . year from the commencement of the policy. The logic behind the .%year time frame is that insurance companies feel that suicide cannot be planned a year in advance. Apart from these# the claimant>s statement in claim form A in form no. /0:/ Ethis form is different to the one to be filled in case of a non% early death claimD# a certificate from the hospital where the deceased was last treated# a certificate of burial Esigned by a person who actually saw the body being crematedD and a certificate from the employer of the deceased also need to be submitted to the insurance firm. Also# for a death claim to be entertained# the life insurance policy# for which a claim has been raised# should be active Ei.e. in forceD at the time the claim is made. As obvious as that may sound# it is important# as it is not binding on the insurance company to settle claims made on policies# which are not in force. 4ife insurance# unlike any other financial product# is considered as Hsacred> by most individuals. After all# it provides financial security to the survivors. ndividuals would not like their loved ones to run from pillar to post to get the security that was envisioned for them by the policyholder. t is keeping this in mind that all individuals need to know the procedures# which have to be followed in case of claims

PRESEN E O5 LA! IN INSURAN E

82;. <overnment owned companies. (or purposes of this section# except when the context clearly indicates otherwise) I nsurance +ompanyI means an insurance company# association or exchange# or any other entity subject to the jurisdiction of the insurance department. I+ontrolI has the meaning prescribed in section .8;.. I<overnment @wnedI means owned or controlled# directly or indirectly# by another state# territory or jurisdiction of the =nited *tates or by a foreign government or by any political subdivision# instrumentality or agency of either. EbD A government owned insurance company shall not be admitted or authori-ed to do business in this commonwealth until it has demonstrated and continues to demonstrate to the insurance commissionerFs satisfaction that it) does not receive a subsidy or other competitive advantage# as a result of such control or status# that would enable it to compete unfairly with similarly situated authori-ed insurers which are not so controlled or constituted$ is not entitled to claim sovereign or similar governmental immunity or has filed a waiver of sovereign or similar governmental immunity with the insurance commissioner$ cedes no more than fifty per centum E1;AD of its annual gross written premiums to assuming insurers that neither hold a certificate of authority nor are 7ualified reinsurers in this commonwealth$ maintains a policyholdersF surplus of at least thirty%five million dollars EJ/1#;;;#;;;D or such other amount determined by the insurance commissioner calculated and reported in the manner prescribed by the department pursuant to section /2;$ is domiciled in a jurisdiction which has insolvency laws applicable to the insurance company that in law and application are fair# reasonable and not prejudicial to policyholders# creditors or the public# generally$ has filed with the insurance commissioner an irrevocable consent not to seek the protection of .. =.*.+. K /;8 Erelating to cases and ancillary to foreign proceedingsD$

its operation as an insurer would not be detrimental to the public interests of this commonwealth$ otherwise satisfies all applicable re7uirements for the issuance of a certificate of authority# including# but not limited to# reasonable standards of solvency# the deposit of security# the establishment of a special trust fund for the benefit of policyholders or other re7uirements as may be established from time to time by the insurance commissioner$ and is in compliance with the re7uirements set forth in section /;.. Any entity granted a certificate of authority under the provisions of this section shall notify the insurance commissioner within five E1D business days of any material change with respect to clause E.D# E2D# E/D# E8D or E1D of this subdivision# or of any material order or other action affecting its certificate of authority. EcD =pon satisfactory evidence of the violation of this section by an insurance company# the insurance commissioner may# in the insurance commissionerFs discretion# pursue any one or more of the following courses of action) suspend or revoke the certificate of authority of such offending company$ refuse# for a period not to exceed one year thereafter# to issue a new certificate of authority to such offending company$ impose a penalty of not less than five thousand dollars EJ1#;;;D nor more than twenty%five thousand dollars EJ21#;;;D for each action in violation of this section. K 82.. &e7uisites for foreign companies to do business. Lto be inserted.M K 82.... =se of name. The nsurance +ommissioner may prohibit the use# by any domestic stock or mutual insurance company or association and the use in this +ommonwealth by any foreign or alien stock or mutual insurance company or association# of a name when# in his judgment# it too closely resembles that of an existing company or association authori-ed to do business in this +ommonwealth or is likely to confuse or mislead the public. This section shall not prevent any company or association authori-ed to do business in this

+ommonwealth on the effective date of this act from continuing thereafter the use of its full correct name on such date.

K 822... (iling of statement of ownership of shares of stock$ limitation of rights. Lto be inserted.M K 82C. 'lection of directors and trustees$ terms$ vacancies. Any stockholder or member elected to the post of director or trustee shall continue in office unless the insurance commissioner# after such investigation as he deems proper# shall determine that the responsibility# character# and general fitness for the business# of such individual are not such as to command the confidence of the public# and to warrant the belief that the business of the company will be honestly and efficiently conducted in accordance with the intent and purpose of this act. Any adjudication by the insurance commissioner pursuant to this section shall be subject to the provisions of the Administrative Agency 4aw# Act of Nune 8# .C81 EP.4. ./::D.