Life Insurance in India made its debut well over 100 years ago.

Life insurance

Life insurance in India made its debut well over 100 years ago. Life insurance is a contract that pledges payment of an Amount to the person assured (or his nominee) on the happening of the event insured against.

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to Pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as Terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lumpsums.

Contract of Insurance

A contract of insurance is a contract of utmost good faith technically known as uberrima fides.

The doctrine of disclosing all material facts is embodied in this important principle which applies to all forms of insurance. At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.

Protection

Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, Life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

Aid to Thrift

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy installment' facility built into the scheme. (Premium payment for insurance is monthly, quarterly, half yearly or yearly).