Insurance vs Assurance

The specific uses of the terms "insurance" and "assurance" are sometimes confused. In
general, in these jurisdictions "insurance" refers to providing cover for an event that
might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an
event that is certain to happen. "Insurance" is the generally accepted term, but people
using this description are liable to be corrected. In the United States both forms of
coverage are called "insurance", principally due to many companies offering both types
of policy, and rather than refer to themselves using both insurance and assurance titles,
they instead use just one.

Term Insurance

Term assurance provides life insurance coverage for a specified term of years in
exchange for a specified premium. The policy does not accumulate cash value. Term is
generally considered "pure" insurance, where the premium buys protection in the event of
death and nothing else.

There are three key factors to be considered in term insurance:

1. Face amount (protection or death benefit),

2. Premium to be paid (cost to the insured), and
3. Length of coverage (term).

Life insurance or life assurance is a contract between the policy owner and the insurer,
where the insurer agrees to pay a designated beneficiary a sum of money upon the
occurrence of the insured individual's or individuals' death or other event, such as
terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated
amount (at regular intervals or in lump sums). There may be designs in some countries
where bills and death expenses plus catering for after funeral expenses should be
included in Policy Premium. In the United States, the predominant form simply specifies
a lump sum to be paid on the insured's demise.

Life-based contracts tend to fall into two major categories:

• Protection policies - designed to provide a benefit in the event of specified event,

typically a lump sum payment. A common form of this design is term insurance.
• Investment policies - where the main objective is to facilitate the growth of capital
by regular or single premiums. Common forms (in the US anyway) are whole life,
universal life and variable life policies.

CUSTOMER PROTECTION:

Insurance Industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to redress

customer grievances in respect of insurance contracts on personal lines where the insured
amount is less than Rs. 20 lakhs, in accordance with the Ombudsman Scheme. Addresses can
be obtained from the offices of LIC and other insurers.
Insurance is a national matter, in which life and general insurance is yet a booming sector
with huge possibilities for different global companies, as life insurance premiums account
to 2.5% and general insurance premiums account to 0.65% of India's GDP. The Indian
Insurance sector has gone through several phases and changes, especially after 1999,
when the Govt. of India opened up the insurance sector for private companies to solicit
insurance, allowing FDI up to 26%. Since then, the Insurance sector in India is
considered as a flourishing market amongst global insurance companies. However, the
largest life insurance company in India is still owned by the government.

The history of Insurance in India dates back to 1818, when Oriental Life Insurance
Company was established by Europeans in Kolkata to cater to their requirements.
Nevertheless, there was discrimination among the life of foreigners and Indians, as higher
premiums were charged from the latter. In 1870, Indians took a sigh of relief when
Bombay Mutual Life Assurance Society, the first Indian insurance company covered
Indian lives at normal rates. Onset of the 20th century brought a drastic change in the
Insurance sector.

In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and the
Provident Fund Act - to regulate the insurance business. National Insurance Company
Ltd, founded in 1906, is the oldest existing insurance company in India. Earlier, the
Insurance sector had only two state insurers - Life Insurers i.e. Life Insurance
Corporation of India (LIC), and General Insurers i.e. General Insurance Corporation of
India (GIC). In December 2000, these subsidiaries were de-linked from parent company
and were declared independent insurance companies: Oriental Insurance Company
Limited, New India Assurance Company Limited, National Insurance Company Limited
and United India Insurance Company Limited.

37 companies……
CUSTOMER PROTECTION:

Insurance Industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to

redress customer grievances in respect of insurance contracts on personal lines where the
insured amount is less than Rs. 20 lakhs, in accordance with the Ombudsman Scheme.
Addresses can be obtained from the offices of LIC and other insurers.