Make Your Family Secured With Life Insurance Policy Article

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Make your family secured with Life Insurance policy

Insurance is one of the booming sector of India. Nowadays, insurance becomes a necessity in individual's life. There are various types of insurance available in our country, the main two are - General insurance and Life insurance. Let's discuss about the various aspects of these insurance.

Author: Addi Vardhaman

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Insurance is a contract between the insurance company and the policy holder, where the company guarantees a specific amount of money to assign as beneficiary upon the maturity of the policy. In India the insurance sector has gone through a number of changes and phases, particularly in the recent years when the Indian Government opened up the insurance sector for private companies. Nowadays insurance is a federal subject in India. General and life insurance in India is still a nascent sector with huge potential for various global players. Since the inception, the insurance sector has been considered as a booming market. Insurance policies can be of many types according to various needs of a business or person. There are primarily two categories of insurance policy – life insurance policy and general insurance policy.

Life insurance is a contract providing for payment of a sum of money to the policy holder on the happening of a certain event. It is the best method to protect your family financially in case of death, by providing funds for the loss of income. The history of life insurance in India dates back to the year 1818. Then Insurance was only conceived as a mean to provide for English people. Those days a higher premium was charged for Indians than the non-Indians. Then the Bombay Mutual Life Insurance Society started the insurance business in the year 1870. It was the first company to charge same premium for both non-Indians and Indians. Then in the year 1880, the Oriental Assurance Company came to the insurance market. Till the nineteenth century, insurance business was almost entirely in the hands of overseas companies.

Insurance regulation had started in India with passing of the Life Insurance Companies Act-1912 and the provident fund Act-1912. By 1938 there were approximately total 176 insurance companies. The first comprehensive legislative act was introduced with the Insurance Act of 1938 which had provided strict State Control over insurance business. The business of insurance grew at a faster pace after the years of independence. Indian insurance companies strengthened their hold on the business, but despite the growth that was analysed it has been noticed that insurance still remains an urban phenomenon.

Under section 10(10D) of the Income Tax Act, there is specified that the sum received under a life insurance policy, including the sum allocated by the way of bonus on such policy, is not to be included within the purview of income and therefore the claim receipts by the family are not taxable.

Life insurance is not only will help one's family after his/her death, it is also helps when he/she survives. It is a responsibility of every chief earner to guard against the events that could affect his family in the unfortunate circumstances. Thus having a life insurance policy is an essential. There are various types of life insurance policies are available. Among them the majors are, whole life policy, Joint Life Policy, Group Insurance Policy, Endowment Policy, Pension Plan or Annuities, Unit Linked Insurance Plan, Loan Cover Term Assurance Policy, Term Life Policy and Money-back Policy.

The market of life insurance in India is still now in the underdeveloped stage. The penetration of life insurance products was only 19% of the total 400 million of the insurable population. Nearly 80% Indian population are without life insurance cover while health insurance and non-life insurance continues to be a below international standards. The 12 private insurance companies have already grabbed nearly 9% of the market in terms of premium income. The new business premiums of the private players has raised to Rs. 1000 crore in 2002-2003 over the year 2007. Meanwhile, the state owned Life Insurance Corporation of India's new premium business has fallen.

Finally it can be easily said that with the huge number of life insurance policies in force in the world, insurance happens to be a mega opportunity in India.

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For more information about life insurance policy and other general insurance policies. Please visit our website: http://www.paisawaisa.com/

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Make your family secured with Life Insurance policy