Important points for Practice of Life &General Insurance

1. Insurance Regulatory and Development Authority (IRDA) was established

in 1999 and incorporated in 2000.
2. The term Assurance refers to coverage of risk of life or property.
3. Non-Life insurance provides insurance facilities in various segments such as
General insurance related to fire, marine etc.
4. Overseas trade covered under Marine insurance.
5. In fire insurance, loss of profit policy is called consequential loss policy.
6. The General Insurance Company is required Rs. 100 crore as minimum paid
up capital.
7. A nomination of policy can be made only in favour of any individual.
8. The one time premium paid policy is known as Single Premium Policy.
9. Compared to the premium for a entire or whole life plan, the premium for an
endowment plan will be more for the same age.
10. Voyage, time, mixed, valued policies are called as marine insurance policy.
11. Loss of passport, loss of checked in baggage, delay in receiving checked in
baggage etc. are similar risks in the nature of taking insurance policy.
12. The term “Uberrima fides” is known as principle utmost good faith.
13. General insurance provides security against risk of loss.
14. “Yogakshema” the Sanskrit word derived from Rig Veda.
15. The theory or principle of contribution ensures that an insured does not
profit by insuring with multiple insurers.
16. The insurance helps to reduce the financial consequences of adverse
situations.
17. The main purpose of having life insurance to make an avenue for long term
investment.
18. Insurance works on the principles of sharing of losses, probabilities,
randomness, risk factors etc.
19. Damage to machinery & property, impact on the health or life of a person,
leakage of toxic products into the atmosphere etc. are including under the
term Risk.
20. Religious beliefs interfere with the purchase of life insurance sometimes.
21. Insurance Agents, Insurance Brokers, Third Party Administrators and other
insurance related business activities performing persons required to get
license or approval from IRDA.
22. A Life Insurance agent collects the premium from the policyholder and
remits it to the insurer’s office; he is acting as an agent of the Insurance
Company.
23. Insurance may be described as a social device to reduce or eliminate risk of
loss to life and property.
24. The important reason for insurers to sell life insurance policies through
agents with the intention that many people require personalized guidance for
selecting the right policy.
25. Insurable interest must be present in a fire insurance contract at the time of
contract and at the time of loss.
26. Over insurance is the amount for which a subject matter is insured is more
than its actual value.
27. Unit-Linked Insurance policies are those where a part of the premium is
charged for the risk cover and the rest is invested in selected mutual funds as
per the choice of the investor.
28. Solvency Margin is an amount in excess of the value of insurer’s assets over
the amount of liabilities.
29. De-tariffing is pricing of insurance products driven by market forces.
30. TAC stands for Tariff Advisory Committee