Principle of life insurance.
Life Insurance policy Promises that Insurer will pay to the policyholder a certan sun of money,if the person insured dies or any contract-specified event happens.
Insurance is a contract,where there is an agreement between 2 or more parties,for legally binding relationship.
A simple contract must have these principles:
Offer and acceptance,
Consideration,
Capacity to contract,
Legality of object.
capacity of performance.
intention to create legal relationship.
Insurance is a specialised contract,where there are 3 more
Principle of Utmost Good Faith
Principle of Insurable Interest.
Principle of Indemnity
Principle of Utmost Good Faith.
Non-Disclosure of material facts and Information such as Age,height,build,Health of person insured,habits,personal history,family history,nature of occupation,would put the Insurance Co at a disadvantage.In such cases,Insurance Co can ask for Medical Report or Medical Examination.
Its the duty of proposer(policyholder) to make a full disclosure to the Insurer(Insurance Co),in the event of failure to disclose material facts(such as Age,height,build,Health of person insured,personal habits(like smoking/drinking or tobacco consumption..etc),personal history,family history,nature of occupation),the Insurance contract will be held Null and void.and proposer cannot defend such non-disclosure,by saying/thinking that fact was not material to Insurer.
Insurance Application Form is called as Proposal for Insurance.in it proposer has to make a declaration that all the statement in the proposal form are true in every respect ,and if any untrue statements are made,the insurer would treat the insurance contract null and void and forfeit all the money paid as premia.
Principle of Insurable Interest.
It means the proposer must have a stake in well being of person insured and proposer could suffer a loss,if the Risk event happens.
for eg.
A husband has Insurable interest in the life of his wife and vice versa.
parents have insurable interests in the lifes of thier children.
Principle of Indemnity.
Insurance is meant to compensate loss,it does not mean,one take insurance just to make profit.
Need for Insurance:
Risks arise bcoz there are needs to be fulfilled.if there are no needs there would be no risks.needs of people are not same,they depend on age,occupation,family,habits and place of residence...etc. so while buying insurance one should be aware of his needs.
one has to take future expenses also like new car,or buying a house or childrens education,daughters marriage,which are ambitions and dreams.insurance helps in planning for future expenses in advance than planned for.
Life Insurance policy Promises that Insurer will pay to the policyholder a certan sun of money,if the person insured dies or any contract-specified event happens.
Insurance is a contract,where there is an agreement between 2 or more parties,for legally binding relationship.
A simple contract must have these principles:
Offer and acceptance,
Consideration,
Capacity to contract,
Legality of object.
capacity of performance.
intention to create legal relationship.
Insurance is a specialised contract,where there are 3 more
Principle of Utmost Good Faith
Principle of Insurable Interest.
Principle of Indemnity
Principle of Utmost Good Faith.
Non-Disclosure of material facts and Information such as Age,height,build,Health of person insured,habits,personal history,family history,nature of occupation,would put the Insurance Co at a disadvantage.In such cases,Insurance Co can ask for Medical Report or Medical Examination.
Its the duty of proposer(policyholder) to make a full disclosure to the Insurer(Insurance Co),in the event of failure to disclose material facts(such as Age,height,build,Health of person insured,personal habits(like smoking/drinking or tobacco consumption..etc),personal history,family history,nature of occupation),the Insurance contract will be held Null and void.and proposer cannot defend such non-disclosure,by saying/thinking that fact was not material to Insurer.
Insurance Application Form is called as Proposal for Insurance.in it proposer has to make a declaration that all the statement in the proposal form are true in every respect ,and if any untrue statements are made,the insurer would treat the insurance contract null and void and forfeit all the money paid as premia.
Principle of Insurable Interest.
It means the proposer must have a stake in well being of person insured and proposer could suffer a loss,if the Risk event happens.
for eg.
A husband has Insurable interest in the life of his wife and vice versa.
parents have insurable interests in the lifes of thier children.
Principle of Indemnity.
Insurance is meant to compensate loss,it does not mean,one take insurance just to make profit.
Need for Insurance:
Risks arise bcoz there are needs to be fulfilled.if there are no needs there would be no risks.needs of people are not same,they depend on age,occupation,family,habits and place of residence...etc. so while buying insurance one should be aware of his needs.
one has to take future expenses also like new car,or buying a house or childrens education,daughters marriage,which are ambitions and dreams.insurance helps in planning for future expenses in advance than planned for.
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