Today every person in the world is surrounded by uncertainties and risks. The fear of losing what he has always haunts him. Whether he is the richest person in the world or a common man whether he is the owner of a big industry or a small or shopkeeper, politician or actor, sportsman or sports organizer, farmer-labourer or scientist all are in danger of their future. be afraid of.
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If someone is concerned about his health, then after his death, someone is concerned about the destruction of property due to natural calamities such as storm, disturbance, earthquake, then an employee has to keep the goods of his business safe. Concerned about his job, then the boss is tormented by the fear of betrayal by the employee. If the businessman is worried about the competitor, then the consumer is worried that if he is not being given adulterated or counterfeit goods, the partners are worried about the money being taken by other partners, then the owner of the factory has a strong hold of the legal claws and works in his factory. There is concern about taking measures to protect the lives of the workers and workers, this means that in the modern technological age, the whole life of all of us and the environment around us is full of fear and worries. These concerns make a person prone to risk and create uncertainty in life, so the ideas expressed by Frank H Knight decades ago are proving true even today that risk is the name of uncertainty and uncertainty is one of the basic realities of life. is."
It is the nature of man that he wants to protect himself. To keep himself safe, man has taken many measures from the primitive age to the present, one of those measures is insurance. Insurance is as old as civilization in ancient times, it was in the form of mutual aid and cooperation. At present, the work of insurance is performed by companies and corporations. The word "Yogaksham" has been used for insurance in Rigveda. The Manusmriti also mentions "the purchase price of the commodity, the selling price, the distance of the quantity, the related expenditure and the sum, that is, the tax should be collected from the traders keeping in mind the risk and safety. In order to provide security, but at present, insurance is providing security as well as opportunities for investment and increase in production.
It is only because of insurance that it becomes possible for us to overcome uncertainties and risks. Therefore, insurance is becoming an essential necessity for an individual, society, business and nation. Without it it is difficult to walk in a world full of risks and uncertainties. According to American scientist Calvin Coolidge, insurance is that modern means by which man can make the uncertain equal to the definite and the unequal. It is the means by which success can be almost certain. Through this, the powerful contributes to the help of the weak and the weak receives help from the strong, but not by the grace of anyone but by the authority which he has bought by paying. Insurance man works according to the golden rule of religion - "Bear each other's suffering together"
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Insurance : Meaning and Definitions of Insurance
Different scholars have defined insurance from their own point of view. From the point of view of the general public and sociologists, a device of protection against risks has been considered. Economists have defined insurance on economic or commercial basis keeping in mind the economics of insurance. Those taking legal point of view have described insurance as a contract. Thus scholars have defined utility based, process based and legal definitions of insurance. All these have been divided into the following three parts for the convenience of study:
(1) General definitions
(2) Functional Definitions
(3) Contractual/Statutory Definitions
(1) General Definitions
According to Sir William Beveridge, “Insurance is the taking of risks collectively.” According to this definition, the act of insurance is to bear the risk of one person which he cannot bear alone.
According to John Magee, insurance is that scheme under which a large number of people together take on their shoulders the risks of a single individual.
According to Thomas “Insurance is a provision that a prudent person makes against accidental or inevitable events, losses or misfortunes. It is a method of sharing or spreading risks.
It is clear from these definitions that insurance is a social and cooperative way of spreading risks, in which persons with similar risks transfer their risks to another person or an organization (insurer) or share them collectively.
(2) Functional/Business Definitions
Some scholars have clarified the process of insurance by giving functional definitions of insurance, how insurance protects against loss or compensates for loss. According to these definitions, insurance is the process of protecting the insured from loss and indemnification.
According to Encyclopedia Britannica "Insurance is a social method by which a large group of personsReduces or eliminates some common measurable economic loss to all members of the group by the arrangement of contribution.
According to Ragal and Miller, “Insurance is a social measure or scheme by which the uncertain risks of isolated individuals can be linked with those of a group and those risks can be made more definite. Small contributions from time to time by all individuals The loss can be met from the fund created from it.
According to the Federation of Insurance Institutes, Mumbai, "Insurance is a method in which persons with a similar risk appetite contribute to a common corpus, some of which is to meet the losses of unfortunate persons in accidents.
It is clear from all these functional definitions that insurance
It is a social measure under which a large number of people form a fund under an organization by paying a contribution (premium) to get protection from certain risks and out of that fund the members are to be compensated for measurable economic loss caused by the risk. Is.
(3) Contractual/Statutory definitions.
These definitions explain the legal nature of insurance.
According to Justice Tyndall, “Insurance is a contract under which the insured pays a certain sum of money to the insurer in consideration of taking the risk of the occurrence of a certain event.
According to Regal and Miller, “In legal terms, it is a contract under which the insurer agrees to meet the insured for the financial loss caused by the agreement and the insured agrees to pay a consideration (premium) for it.
According to Patterson, “Insurance is a contract under which one party takes the risk of another party in exchange for a consideration called premium, and in the event of the occurrence of a specified event, he or his nominee shall be given a certain or assured amount.” promises to pay the amount.
The statutory definitions of insurance make it clear that insurance is a contract between two parties (the insured and the insurer) in which the insurer, in exchange for a fixed return (premium), will compensate the insured for loss due to predetermined causes or the occurrence of certain events. but makes a promise to pay a certain or specified sum of money. Conclusions of Insurance by Different Scholars
On studying the definitions presented from their respective point of view, it can be concluded that insurance is a social and cooperative system, a method of collectively bearing the risks in which the persons suffering from similar types of risks make some contribution (premium) to the insurer. ) and the insurer has paid from this fund to the insured the amount of actual loss caused by the event or a predetermined amount on the occurrence of the event mentioned in the insured.
Characteristics of Insurance:
benefits of insurance
1. Protection against risks:- Insurance is the cover of financial security. It does not eliminate the risks of life in relation to goods or property, but is a way of protecting it from risks.
2. Division of Risks: Insurance is the method of dividing the economic loss caused to an individual, family or organization by the occurrence of a certain event among all the insured persons. These incidents can happen in any form like death of family member, maritime accidents, theft, accident, natural calamity etc.
3. Co-operative system: Prof. R. s. According to Sharma, insurance is a co-operative system." The basis of insurance is the principle of co-operation i.e. "one for all and all for one, a fund is created by voluntarily contributing to the collective interest of some people and any In case of loss to the member, compensation is made from the fund.
4. Wide Scope: The scope of insurance is very wide. This includes life insurance, fire insurance, marine insurance, as well as many modern or non-traditional insurance. In these non-traditional insurance, we include agricultural insurance, livestock insurance, cottage insurance, medical insurance, vehicle insurance, reliability insurance, etc.
5. Insurance of Pure Risks: There are two types of risks, first pure risks and second hypothetical risks Pure risks are those in which there is only possibility of loss. Speculative or speculative risks are those in which the potential for both loss and profit remains. Insurance is only a means of protection against future net losses. Therefore, only pure risks can be insured.
6. Not against public policy or public interest: Insurance cannot be done for those works which are against public interest. For example, thieves, dacoits or pickpockets, etc. cannot insure their looted goods. Because these actions are against the public interest.
7. Regulation by law: At present, the insurance business in each country is controlled by the government of the country. The government of every country makes laws for the operation of the insurance system. In our country, Bina is regulated and controlled by the Life Insurance Act, Marine Insurance Act, General Insurance (Nationalization) Act and Insurance Regulatory and Development Authority (IRDA) etc.
8. Assessment of Risks: Both the probability of risk and the amount of risk are determined by the insurer before insuring. Based on that premium is charged from the insured. Higher the risk higher the premium
9. Insurance not gambling: Insurance is not gambling. loss to a party in gamblingand benefit the other whereas in insurance it is not so. Insurance is done to avoid loss whereas gambling is played for entertainment or profit. Insurance is a valid contract whereas gambling has been declared void in the Contract Act. Insurance is done for the public interest, whereas gambling does not have public interest, luck is not important in insurance whereas luck is of great importance in gambling.
10. Insurance is not a donation: Insurance is not a donation either, because charity is given without any real consideration. Whereas in insurance there is a valid and real return. The insurer takes a fixed consideration (premium) from the insured while the donor does not have to pay anything. Insurance is a business. The donor does not get any monetary benefit in return for the donation.
other characteristics:
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(i) Insurance is based on certain principles.
(ii) Insurance has become an institutional framework.
important insurance terminology
Some words are used during insurance, which are necessary to understand--
(1) Insurer - A person or entity who undertakes to cover the loss caused by risks to another person. Insured or Insured or Insured -
(2) The other party to the contract of insurance who is the owner of the subject matter of insurance or who has an interest in the subject matter of insurance. The insured can be an individual, firm or entity or in the form of a company. It pays the premium to the insurer.
(3) Premium - It is the consideration or value of an insurance contract that the insurer receives from the insured.
(4) Subject to insurance - The life or property which is insured is called the subject matter of insurance. under insurance
(5) When a property is insured for an amount less than its value, it is called under insurance.
(6) Over-insurance - When a property is insured for an amount more than its value, it is called over-insurance.
(7) Reinsurance - When an insurer gets another insurer to re-insure the risk insured by him to reduce his risk, it is called reinsurance.
(8) Double Insurance - When an insured buys more than one insurer on the same subject matter from more than one insurer, it is called double insurance.
(9) Letter of Insurance - A letter of insurance is a written document by which an insurance contract is entered into between the insurer and the insured.
(10) A lapsed insured is one whose right to receive the benefits of the insured ceases due to non-payment of due premiums in time.
(11) Assurance - This word is used for those insurance contracts in which the liability of the insurer is fixed, the word assurance is used for life insurance contracts.
(12) Insurance - This word is used for those contracts in which the possibility of loss is found but the loss is not certain. The term is used in indemnity contracts (fire, marine insurance).
(13) Risk Any bad damage, destruction, loss or accident, possibility or uncertainty is called risk.
(14) Insurance Hazard - The reasons which in a particular situation cause loss of the subject matter or increase the possibility of loss.
What are the types of insurance - what are the types of insurance
Scope and Kinds of Insurance
It is believed that the modern form of insurance that we are seeing started in the 13th century. If we look at the origin and development of insurance, the first description of marine insurance is found. After this, gradually fire insurance, life insurance and other insurances have become prevalent. At present, many types of insurance are prevalent, that is, different types of insurance are done by the insurers according to the need and the variety of risks, in the present era the field of insurance has become very wide. For the convenience of study, we can classify insurance on the following main grounds
(1) Classification on the basis of nature of insurance
(2) Classification on the basis of occupation
(3) Classification on the basis of risk
Insurance also classified on the basis of nature
On the basis of the nature of insurance, the insurance can be classified as:
can be classified into five categories
1. Life Insurance
2. Fire Insurance
3. Marine Insurance
4. Social Insurance and
5. Miscellaneous Insurance
1. Life Insurance - What is Life Insurance
Under life insurance, the life of individuals is insured. In this, the subject matter of insurance is human life. In life insurance, the insurer promises to pay a fixed sum of money to the insured on his death, or to the insured on the completion of a specified period, in exchange for a fixed premium. The insured has to pay the premium amount for a specified period of time. If the insured dies before the specified premium period, then his successor does not have to pay further premium, in case of death of the insured, his nominee or successor gets the right to receive the sum assured.
Life insurance provides financial security to the insured and his family members. Every person can insure any person in whose life he has an insurable interest. Along with protection in life insurance, there is also an investment element. Life insurance business in our country is carried on by Life Insurance Corporation of India (LIC) as well as some private companies like Kotak Mahindra Bajaj Allianz and ICICI Prudential.
2. Fire Insurance -
Fire insurance is the insurance in whichIn this the insurer gives an undertaking to indemnify the insured for damages caused to the property by fire. It is an insurance of indemnity in which only the actual loss is indemnified by the insurer. Generally, fire insurance can be done for a period of one year only. In addition to the loss due to fire, this insurance is also done to compensate for certain consequential losses. This insurance can also be done for the protection of property from the risks of riots, rebellion, disturbances, gas explosion, earthquake, storm, flood, inundation, aircraft damage, lightning etc.
The importance of fire insurance is immense in the modern industrial age. There is an increased risk of fire in factories, warehouses, shops, residential settlements, with excessive use of electricity or even in an electrified construction process, the risk of damage from fire is increased everywhere.
3. Marine Insurance
“Maritime insurance is the insurance of indemnity in respect of the amount of the ship, cargo and freight from various maritime risks. Marine insurance can be done for the ship, the cargo carried in the ship, the freight of the ship etc. Marine insurance is done for damage caused by collision with another ship or reef.
Two types of insurance are included in marine insurance, first, ocean marine insurance and second inland i.e. inland marine insurance. which arises during the delivery transaction of goods to the godown of the insured and the buyer (importer).
4. Social Insurance:
Social insurance schemes have been developed to provide economic security to the low and destitute sections of the society. At present, the government starts social insurance schemes for the welfare of the people and for the upliftment of the weaker sections. Under this insurance, many risks are insured like unemployment, illness, accident, accidents, old age, maternity, death etc. The National Labor Commission has defined social insurance as "Social insurance is that scheme which provides rights to the people of low income group in the form of benefit which is collected from the contribution of the insured, employer and government. "
It is thus clear that social insurance is a device by which facilities are provided out of a common fund for the purpose of maintaining the standard of living of the insured at the time of unemployment, illness or accidental accidents. This fund is to be created with the three-party contribution of workers, government and services.
Following are the main types of social insurance
1. Illness Insurance- In this, arrangements are made for medicines, medical facilities and compensation for the loss of salary during the period of illness when the insured person falls ill. Mediclaim scheme has been run by the General Insurance Corporation for this.
2. Death Insurance - In this, an amount is provided to the dependents wholly or partly on the death of the insured in the course of work. In this way the employer transfers his liabilities to the insurer by insuring the death of his employees.
3. Incapacity Insurance - In this, there is a provision of compensation in case of an accident in the factory that disables an employee wholly or partially, although according to the 'Labour's Compensation Act, this liability is of the employers, but the employer by getting such insurance Can transfer his liability to the insurance company.
4. Unemployment Insurance- When the insured becomes unemployed due to some specific reasons, then financial assistance is given for the period till they get employment again.
5. Old Age Insurance - In this type of insurance, the insurer provides financial assistance to the insured or his dependents after a certain age. It is a scheme to provide assistance to the insured in old age.
Due to the propagation of the ideology of social justice of the government, at present in our country, the government has started various insurance schemes for the poorer sections of the society like porters, rickshaw pullers, landless labourers, sweepers, artisans, handicraftsmen, etc., in which only a nominal premium has to be paid. Is. In some plans, there is a provision of accident benefit even without premium.
5. Miscellaneous Beges – The area of risks has increased as a result of urbanisation, industrialisation, automation and technological advances. Various types of risks have expanded in our lives. Presently, many need based insurance plans have been developed by the insurer due to the diversity and breadth of risks. Some of such insurance contracts are described below.
(1) Vehicle Insurance - It is mandatory to get insurance of many automatic and valuable vehicles of road traffic such as bus, truck, scooter, motorcycle car etc. By insuring such vehicles, the damage caused to the vehicle and third party in the accident can be compensated by the insurer. The term of vehicle insurance is one year. In this, the insurance company assumes the liability of all three types, i.e. damage to the vehicle, damage caused to the owner of the vehicle and third party damage caused by the vehicle.
(2)- Personal Accident Insurance - In the case of this insurance, the insurer assumes the responsibility of meeting the possible loss to the insured in the event of an accident such as death, permanent or partially disabled. died in an accidentIn case of death or complete incapacitation, the entire amount of insurance is compensated, whereas in case of partial incapacity, a certain proportion is compensated according to the terms of the insured. Four subsidiaries of General Insurance Corporation issue public accident insurance in respect of personal accident. It is also popular under air flight and roadways travel.
(3) Theft and Robbery Insurance - In this type of insurance, the insurer promises to indemnify the insured against loss due to burglary, burglary etc. The insured insures his house, shop, warehouse, goods being carried during the journey, money to be brought and taken etc. It is useful for cinema halls, petrol pumps, residential hotels, banks, financial institutions etc.
(4) Livestock Insurance - Insurance of Livestock Insurance In this type of insurance, if there is loss of animals due to epidemic disease or any other reason, then the insurer indemnifies the insured. This includes insurance of cow, bull, buffalo, donkey, horse, camel, sheep, goat etc.
(5) Crop Insurance - Due to the risks of agriculture, this insurance is quite prevalent for some years. In this, the insured is compensated for the damage caused by epidemic outbreaks due to climatic reasons such as drought, flood, storm, plant disease.
(6) Crime Insurance - In this, protection can be obtained from dacoity, robbery, riots, terrorist activities etc. Banks, financial institutions, transport institutions, hotels, petrol pumps and other business institutions can be protected by this insurance.
(7) Other insurance - In addition to the above, many other insurances are also prevalent nowadays, it is not possible to mention them all, some of them are cycle insurance, bullock cart insurance, poultry insurance, air travel, forest insurance, beauty insurance, entrepreneur's insurance, hotel customers Insurance, Goods Insurance etc.
other insurance
Apart from the above, many other insurances are also prevalent nowadays. It is not possible to mention them all, some of them are cycle insurance, bullock cart insurance, poultry insurance, air travel, forest insurance, beauty insurance, entrepreneur's insurance, hotel customers' insurance, luggage insurance, etc. Insurance Agent
Evaluation of the success of an insurer's insurance business depends on the fact that the popularity and credibility of the insurance company in the society. Which insurance company is selling which insurance products in what quantity and for how long? At present, the insurance company is providing the facility of many insurance products to the insured through many plans, along with the edited customers of the insurance company being scattered at remote places. In such a situation the insurer alone is unable to establish contact with the customers. As a result, an intermediary is required to establish a relationship between the insurer and the insured. The person acting as an intermediary between the insurer and the insured is called an insurance agent. There is a difference between an insurance agent and a general agent. Therefore, it would be appropriate for us to study the agent first.
Meaning of Agent
In India, the appointment of an agent, his authority and the regulation of the relationship between the principal and the agent, is done according to the agency law. The provisions of the Agency Law (Law) are given in section 182 to 238 of the Indian Contract Act 1872. According to the provisions of the agency, agency is the name of the relationship between the agent and the principal.
According to section 182 an agent is a person appointed by any other person to represent himself in the performance of any of his acts or dealings with any other or third party.
The person or person who acts or represents the agent is called principal or employer or owner. (Section 182)
Thus it is clear that an agent is a person appointed by the principal to establish contractual relations of his (principal) with third parties. Thus the agent acts as an intermediary between the principal and third parties. The agent performs all the functions of his master (pradhan) only within the limits of the express or implied rights and instructions given by the owner.
Who can appoint an agent?
The agent is appointed by the principal but the principal can only be a person who has the capacity to enter into a contract. Therefore, the following persons can appoint an agent
(1) all busy people
(2) All persons of sound mind
(3) All persons who have not been disqualified by any law of the land.
In addition, the agent may be appointed by any person authorized by law. For this reason, the agent can also be appointed by the following person
(1) by any corporation or company.
(2) Appointment by a natural guardian or a court appointed guardian
(3) Appointment of agents jointly by several heads
Who can become an agent?
According to section 184, any person can become an agent. Therefore, any person, whether he has the ability to contract or not, all agents can be appointed. Therefore, minors, persons of unsound mind can also be appointed as agents. For this reason, it is sufficient to have an arrangement for setting up the agency. But appointing a minor or a person of unsound mind as an agent is a risky act. Doing so can have the following consequences
(1) Such an agent is not liable to the principal for his unauthorized and wrongful acts.
(2) The principal is personally liable to the third party for the acts done by such agent because he has acted on behalf of the principal.
Difference Between Agent and Servant According to the High Court of India, there is a difference between agent and servant. The remuneration of the agent is in the form of commission or fee. Whereas servant remuneration is in the form of salary. An agent can never be a servant, whereas a servant can be an agent at times. The agent enters into a contractual relationship with a third party on behalf of the employer but the servant does not.
An insurance agent is an important means of contact, through which the relationship between the insured and the insurer is established, there are workers of insurance companies who search for lives (insured). encourage you to get insurance. Prepare them and take them to the corporation, and provide insurance services, without the insurance agent, the work of the insurance companies comes to a standstill.
In the general sense, an insurance agent is a representative licensed by the insurer who agrees to perform the business of renewing or operating the original insurance business in exchange for commission or other operating remuneration.
Characteristics of Insurance Agent
1. The insurer (insurance company) is its employer (owner).
2. The insurance agent has to obtain a license under the rules made under section 42 of the Insurance Act.
3. The insurance agent has to make efforts to get the insurance business.
4. The consideration is paid to the insurance agent on commission or other basis.
5. The insurance agent cannot pay commission or remuneration to any other person for carrying on the insurance business. This act is an illegal act.
life insurance qualifications
(Qualification ofInsurance Agent)
As per the Insurance Act and the Insurance Agents Regulations 2000, those applying to obtain the license of an insurance agent The person should have the following qualifications
(1) he is a citizen of India
(2) The applicant must be at least 18 years of age, that is, an adult.
(3) He should be of sound mind.
(4) He has not been found guilty by a competent court of abetting the offense of embezzlement, fraud, forgery or of any such offense punishable, but if five years have elapsed from the completion of the sentence of any such offence, he shall be eligible for this category. does not come
insurance agent job
Function of Insurance Agent
An agent, whether he is doing business in the field of life insurance or general insurance, has to do the following things for his employer (insurer)
(1) Contact with the proposers -
Under this work, the agent establishes contact with such people who have either not insured at all or who are willing to get re-insured, for this he gives them new information related to insurance, solves doubts. Explains the importance of various schemes.
(2) To encourage proponents -
The agent persuades them to get insurance by explaining the plan according to their points such as the information of the plan and the need of the proposer in an effective manner. For this he also has to contact the proposer again and again.
(3) Fulfillment of offer letter:
The agent gives the offer letter of insurance to the proposer and helps to complete it correctly by explaining every point of it, which things are not understood by the proposer, the agent has to explain clearly.
(4) Preparing the necessary forms:
The proposer has to give the necessary forms like birth certificate, medical certificate along with the proposal. The agent also helps him in its arrangement.
(5) Submitting the offer letter after receiving the premium.
(6) Informing the insured or his heirs about the receipt of payments to the insured.
(7) To comply with the things/instructions notified by the Insurance Authority.
(8) Advising the proposers regarding the nomination, handing or renewal of the letter of insurance.
(9) To assist in claims payment, loss and destruction of insurance papers etc.
(10) To execute the development works, programs of Life Insurance Corporation, General Insurance Corporation or Insurer.
Prohibitory duties of an insurance agent An insurance agent cannot do the following:
(1) To recover any sum of money for the insurer or the corporation.
(2) To provide commission or discount for insurance.
(3) Acceptance of any risk on the part of the insurer.
Cannot print or distribute any kind of advertisement or magazine without the permission of the corporation or the insurer.
Interfering with the affairs of any other insurance agent or luring, luring, etc., his proposers.
(6) Cannot function without a valid license obtained by the insurer or after the expiry of the period of the license.
(7) To proceed in the territory of any other insurer.