Insurance

Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company.

A pool is created through contributions made by persons seeking to protect themselves from common risk. Premium is collected by insurance companies which also act as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is paid out of this pool.
Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.

Definition
Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance.

The party bearing the risk is known as the insurer or assurer and the party whose risk is covered is known as the insured or assured.

Concept of Insurance / How Insurance Works
The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In case a person actually suffers a loss on account of such risk, he is compensated out of the same pool of funds. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums.

WHY SHOULD I BUY INSURANCE?
All assets have some economic value attached to them. No person can deny that there is also a possibility that these assets may get damaged/destroyed or become non-operational due to risks like breakdowns, fire, floods, earthquake etc. Different assets are exposed to different types of risks like a car has a risk of theft or meeting an accident, a house is exposed to risk of catching fire, a human is exposed to risk of death/accident. Insurance is needed because of following reasons:

Social Security Tool
Insurance acts as an important tool providing a sense of security to the society on a whole. It is the right of every human-being to have basic amenities like food, clothing, housing, medical care, standard of living necessary for his personal and family is well being, and right to security in case of unemployment, disability, sickness or any other circumstances out of his control.

In case the bread earner of a family dies, the family suffers from direct financial loss as family is income ceases. As a result, family is economic condition gets affected unless there are other arrangements to rescue the family from this situation. Life insurance is one alternate arrangement that offers some respite to the family from financial distress. Otherwise this family would have been pushed into the lower strata of the society, which would be an additional cost to the society. This is because subsidies would have to be given to the family so as to enable it to survive and enjoy the basic rights at par with other people. Moreover, a poor family is generally seen to have a large family size with family members being illiterate. This on a whole affects the society and is a cost to the society. Therefore, insurance compliments the state in social management efforts.

Uncertainty
The basic need of insurance arises as risks are uncertain and unpredictable in nature. Getting insurance for an asset does not mean that the asset is protected against risks or its exposure to risk is reduced, but it actually implies that in case the asset suffers any loss in value due to such risk, the insurance company bears the loss and compensates the insured by making payment to him.

Economic Development
The premium paid by people to the insurance companies is a part of their savings. Insurance, thus, acts as a useful instrument in promoting savings and investments, particularly within the lower-income and middle-income families. These savings are ultimately used as investments fuelling economic growth.

General Purposes of Insurance

Insurance is widely popular and beneficial because of its following general purposes:

  • These plans are best suited for people aged upto 35 years as it provides higher protection at low cost. These plans are also beneficial for a person whose income is low and want to secure their family from financial default in case of his death.Protection or safety (Term insurances)
  • Marriage or education of the child (Children plans)
  • Speedy growth of money & risk cover (Unit Linked Plans)
  • Saving and Protection (Endowment type plans)


Introduction of Medicalim

The last decade has been favorable for the medical industry. A stupendous rise in the gamut of medical services in the wake of medical advancement has made this industry one of the significant contributors to the gross domestic product of the Indian economy.

On the darker side, there is a steep rise in the cost of medical services thereby making it difficult for people to afford medical treatment. There have been cases of people committing suicide after giving in to the excessive financial burden. In extreme cases, people prolonged taking medical treatment to an extent that it became very late. Moreover, some of the bed-ridden patients even attempted suicide to relieve their family from medical expenses. Such problems are normally faced by poor and middle economic strata of the society.

To overcome such a situation, medical insurance, commonly known as mediclaim and health insurance, was introduced on a large scale. Insurance companies aggressively promoted this new facility to people and easily found many takers. Mediclaim is a complete health package that provides many medical benefits to people in order to ensure their well-being at any stage of life. Different insurance companies offer various mediclaim policies with varying premiums and benefits. You can easily compare the plans and choose the one that covers your health risks at the cheapest premium amount. Family health insurance is normally highest in demand as it extends the benefit to the entire family.

Mediclaim is a boom in the health sector that has made it possible for everyone to take the best medical treatment without fearing the expenses. This has gone a long way in saving the lives of many due to timely and proper medical care at the right medical center.

Recently, government has also included ayurveda, unani, homeopathy, and other alternative systems of medicine under insurance cover. This favorable move has brought those people within the insurance bracket who have faith in such medical systems.

Women health during pregnancy and infant care are one the neglected areas in our society. Therefore, insurance companies offer special mediclaim packages that cover the hospital expenses of delivery and post-natal services as well as the well-being of a new-born baby.
Saving, protection & liquidity (Money back plans)The above purposes apply for life insurance. In case of General insurance the basic purpose is to protect the insured against financial loss suffered by him or creation of liability, due to the causes covered by the policy.

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In the last five consecutive sessions of losses, investors have become poorer by Rs 6.31 lakh crore.
Thu, 27 Feb 2020 16:43:17 +0530


Nifty formed a Bearish candle on the daily charts. It slipped below its 200-DMA placed at 11,684 on daily charts.
Wed, 26 Feb 2020 16:20:27 +0530


Market is likely to remain volatile ahead of February FO expiry as well as December quarter GDP data, experts said.
Tue, 25 Feb 2020 16:27:05 +0530


SP BSE Sensex closed 806 points lower at 40,363 while the Nifty50 ended with losses of 251 points to close at 11,829 on Monday.
Mon, 24 Feb 2020 16:50:38 +0530


The BSE Midcap and Smallcap has outperformed the benchmark indices with a gain of 0.40 percent and 0.51 percent, respectively.
Fri, 21 Feb 2020 07:20:13 +0530


Momentum on the upside shall pick up on a strong close above 12150 levels, suggest experts.
Thu, 20 Feb 2020 16:25:24 +0530


Traders can make use of dip to create fresh longs with a stop below 12030 levels on a closing basis and look for an initial target of 12178.
Wed, 19 Feb 2020 16:52:19 +0530


Nifty formed a bearish candle which looked like a ‘Hammer’ kind of pattern.
Tue, 18 Feb 2020 16:28:55 +0530


After witnessing a positive opening, the market benchmarks slipped in the negative soon and traded in the red for the most part of the session, eventually settling with losses.
Mon, 17 Feb 2020 16:35:39 +0530


FPIs sold shares worth Rs 704.92 crore, while DIIs bought shares of worth Rs 219.54 crore in the Indian equity market on February 14, provisional data available on the NSE showed.
Mon, 17 Feb 2020 07:39:31 +0530


The apex court#39;s stance weighed on financial stocks also because of their exposure to the sector.
Fri, 14 Feb 2020 17:03:13 +0530


Intraday traders can consider long position if Nifty sustains above 12232 levels.
Thu, 13 Feb 2020 16:38:09 +0530


If the index closes below 12,144 then a fresh leg of downswing shall unfold with initial targets of 11,990.
Wed, 12 Feb 2020 16:32:04 +0530


Traders are advised to wait for at least a strong close above 12138 levels before initiating fresh longs.
Tue, 11 Feb 2020 16:26:13 +0530


Positional traders are advised to create fresh shorts on a breach of 11950 levels on a closing basis and look for a target of 11770.
Mon, 10 Feb 2020 16:39:28 +0530


Geojit has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:13 +0530


Ajcon Global has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:11 +0530


Arihant Capital has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:05 +0530


Hem Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:03 +0530


LKP Research has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:01 +0530


SPA Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:59 +0530


Mehta Equities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:57 +0530


Angel Broking has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:55 +0530


YES Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 26, 2020
Wed, 26 Feb 2020 11:19:07 +0530


The issue will close on March 6. Company proposed to utilise the net fresh issue proceeds towards reduction of the aggregate outstanding borrowings.
Mon, 24 Feb 2020 12:33:40 +0530


The company plans to issue new shares worth Rs 5 billion and will offer up to 130.5 million shares for sale, the prospectus, dated February 18, showed.
Thu, 20 Feb 2020 11:45:03 +0530


A report noted that SBI is likely to raise Rs 2,780-2,880 crore with this IPO.
Tue, 18 Feb 2020 17:57:19 +0530


The offer for sale includes up to 3,72,93,371 equity shares by SBI and up to 9,32,33,427 equity shares by CA Rover Holdings.
Tue, 11 Feb 2020 16:26:03 +0530


The Rs 1,400-crore public issue was subscribed 62 percent despite extending the subscription period twice since its opening, and reducing the price band to Rs 71-77, down from Rs 72-77 earlier.
Wed, 05 Feb 2020 18:12:49 +0530


After the issue, government shareholding in the company will reduce to 74.96 percent from 90 percent.
Mon, 03 Feb 2020 19:46:22 +0530


SEBI#39;s latest move now allows investors to come to exchanges directly, just as they could go to the MFU entirely on their own.
Wed, 26 Feb 2020 22:02:13 +0530


Thanks to popularity of SIPs, individual investors now hold a higher share of MF assets at around 53 percent of total AUM as of December-end
Tue, 11 Feb 2020 18:32:22 +0530


NULL
Wed, 22 Jan 2020 09:31:05 +0530


However, the pace of growth in folio numbers dropped in 2019 as compared to preceding three years. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market.
Tue, 21 Jan 2020 15:14:07 +0530

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