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| LIFE INSURANCE
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Life Insurance is universally acknowledged to be an institution which eliminates 'risk' and provides the timely aid to the family in the unfortunate event of death of the breadwinner.
Life Insurance is a contract for payment of a sum of money to the person assured (or nominee) on the happening of the event insured against. The contract provides for the payment of premium periodically to the Insurance company by the assured.
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The contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier.
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Protection: Life Insurance guarantee full protection against risk of death of the assured. In case of death, full sum assured is payable.
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Long term saving: Life insurance encourages long term saving. By paying a small premium in easy installments for a long period a handsome saving can be achieved.
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Liquidity: Loan can be obtained against a policy assured whenever required.
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Tax Profit: Tax relief in income tax and wealth tax can be availed on the premium paid for Life Insurance.
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By the year 1956, 154 Indian insurance, 16 non-Indian insurance and 75 provident societies were carrying on Life insurance business in India. On 1st September 1956 all the Insurance Companies were nationalised. On September 1956, LIC Act was passed by Indian Parliament and the state run Life Insurance Corporation of India (LIC) has held the monopoly in countries life insurance sector.
In the year 1999, the Insurance Regulatory Development Act (IRDA) was passed in Indian Parliament. By this act a door was open for private companies with foreign equity Life Insurance. By this act an Indian promoter can invest either wholly in an insurance venture or team up with a foreign insurer, with a cap of 26 percent of equity for a foreign partner.
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