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CHAPTER -1 INTRODUCTI0N 1. 1 INDUSTRY PROFILE Page 1 GLOBAL INSTITUE OF MANAGEMENT,AMRITSAR 1.1.1 INTRODUCTION TO INSURANCE Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event. Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large nu
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    CHAPTER -1 INTRODUCTI0N   1. 1 INDUSTRY PROFILE GLOBAL INSTITUE OF MANAGEMENT,AMRITSARPage 1  1.1.1 INTRODUCTION TO INSURANCE   Insurance is a contract between two parties whereby one party called insurer undertakesin exchange for a fixed sum called premiums, to pay the other party called insured a fixedamount of money on the happening of a certain   event. Insurance may be described as a social device to reduce or eliminate risk of life and property.Under the plan of insurance, a large number of people associate themselves by sharing risk,attached to individual.With the help of Insurance, large number of people exposed to a similar risk makes contributionsto a common fund out of which the losses suffered by the unfortunate few, due to accidentalevents, are made good.Insurance is a tool by which fatalities of a small number are compensated out of funds collectedfrom plenteous. Gradually as competition increased benefits given by industry to its customersincreased by leaps and bounds. Insurance is a basic form of risk management which provides protection against possible loss to life or physical assets. Person who seeks protection againstsuch loss is termed as insured, and company that promises to honor claim, in case such loss isactually incurred by insured, is termed as Insurer. In order to get insurance, insured is required to pay to insurance company a certain amount called premium. Premium is collected by insurancecompanies which acts as trustee to pool created through contributions made by persons seekingto protect themselves from common risk. Any loss to the insured in case of happening of anuncertain event is paid out of this pool. Insurance business is divided into four classes: GLOBAL INSTITUE OF MANAGEMENT,AMRITSARPage 2  Life InsuranceFireMarineMiscellaneous Insurance. Insurance provides Protection to investor.Accumulation of savings.Channeling these savings into sectors needing huge long term investment. 1.1.2LIFE INSURANCE : Life insurance is a contract under which the insurer (Insurance Company) inConsideration of a premium paid undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of time whichever is earlier. In case of lifeinsurance, the payment for life insurance policy is certain. The Event insured against issure to happen only the time of its happening is not known. So life insurance is known as„Life Assurance,, The subject matter of insurance is life of human being. Life insuranceprovides risk coverage to the life of a person. On death of the person insurance offersprotection against loss of income and compensate the titleholders of the policy . 1.1.3ROLES OF THE LIFE INSURANCE : GLOBAL INSTITUE OF MANAGEMENT,AMRITSARPage 3  Life insurance as an investment : - Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurancecompanies. Life insurance as risk cover : - Insurance is all about risk cover and protection of life.Insurance provides a unique sense of security that no other form of invest can provide. Life insurance as tax planning : - Insurance serves as an excellent tax saving mechanismtoo. 1.1.4INSURANC CYCLE  Fig 1: Insurance cycle Policy Renewal/Change Options/Application GLOBAL INSTITUE OF MANAGEMENT,AMRITSARPage 4

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Dec 18, 2017
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