Tag Archives: Insurance
Insurable Interest
All risks are not insurable. Otherwise, an insurance contract would be no different from a wagering contract or betting. It was explained earlier that speculative risks are not insurable. A wagering con tract is speculative in nature and is illegal in terms of Section 30 of the Indian Contract Act. A subject matter of a [...]
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LIFE INSURANCE CONTRACTS
A life insurance policy promises that the insurer will pay to the policyholder a certain sum of money if the person insured dies or any other soecified contingency happens. It is a contract, within the meaning of the Indian Contract Act, 1872. A contrct is an agreement between two or more parties to do, or [...]
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Concept of Reinsurance
Insurance companies are taking risks. They have to pay claims as and when they occur. They cannot be sure when the claim will occur and how big the claim may be. This is so because of the very nature of perils. Insurers normally are financially sound enough to be able to pay claims. But there [...]
Invention of Insurance
Insurance has been known to exist in some form or other since 3000 BC. The Chinese traders, travelling treacherous river rapids would distribute their goods among several vessels, so that the loss from any one vessel being lost, would be partial and shared, and not total. The Babylonian writing off the loans, in case of [...]
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Working Fuctionality of Insurance
The mechanism of Insurance is very simple. People who are exposed to same risks come together and agree that, if any one of them suffers a loss, the others will share the loss and make good to the person who lost. All people who sent goods are exposed to the same risks, which are related [...]
Role Of Insurance In Economic Development
For economic development, investment are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth. The Insurance Act has strict provisions to ensure that insurance funds [...]
Insurance is a Social Security
Under a socialistic system the responsibilities of full security would be placed upon the state to find resources for providing social security. In the capitalistic society, provisions of security is largely left to the individuals. The society provides instruments, which can be used in securing this aim. Insurance is one of them. In a capitalistic [...]
Insurance Of Intangibles
The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run the risk of losses, if the importers in the other country default in payments or in collecting the goods. They will also suffer heavily due to sudden changes in currency exchange rates, economic policies or political disturbances in the other [...]
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