Health Insurance Issues Challenges And Perspectives

Health care  insurance  or Medi claim,  as it is popularly known in  India is a comparatively new, and at the same time, fast-developing   insurance  segment. Until the time the industry was opened up for private participation  the concept of healthcare   insurance  was alien to a major  segment of then insurable  population  of India. Until the time the nationalized non-life   insurance  sector, represented by the General  insurance  corporation  of India and its four subsidiaries  were transacting health care  insurance  under a single brand Mediclaim, Mediclaim  was a ‘ Reimbursement Plan.  wherein the insured was entitled  for the reimbursement  of hospitalization  charge as per the terms of the contract. 

the concept of  ‘ Cash Plan” under which the contract provides for the payments of a predetermined amount per day of hospitalization irrespective of the actual  expenditure, was popularized by the private  insurance  companies  once they started marketing healthcare products. For want of proper promotions  and creation of awareness  by the public sector companies the health  insurance  sector  had  almost stagnated. After the advent of the private players,  the sector companies, the health  insurance  sector had almost stagnated. After the advent of the private players the sector became more vibrant . During the decade 1992-2002, the premium income had grown phenomenally 

. During  this period , the sector had grown at an average  rate of 125% per year. the premium from a more Rs. 35 Crores in 1980s had touched Rs. 477 Crores as at the end of the fiscal 2002, and had more than doubled during the fiscal 2002-03. According to estimates, the healthcare premium is expected to be around is Rs. 1,753 crores by the year 2005. To harness the huge unexplored  segment of the health sector, many studies have been conduct  . the principles among the them are the CII-McKinsey  Report and the Report on Health  insurance  by the committee  constituted by the Ministry of Health and family welfare. There are many areas where the reports show agreements.  the following are the areas that are common to both reports.  To attract proper and qualified insurers, the Government  should take necessary initiative  to stimulate the growth of private , social and community sector  insurance .

Multi -tiered insurers  with better understanding  of the regional requirements  should be  encouraged  to set up shop. Health   insurance  is to be  recognized  as a  separate line of  insurance . The entry  level of Rs. 100 crores  and the solvency norms are discouraging because stringent norms  make it difficult  to break-even within a reasonable  time. Reduction  in the entry norms will improve stability  of the business. A view is emerging that the capital adequacy  should be have a relationship  to the type of business of the insurer and the nature of operations. The IRDA should develop separate  regulations for the health score and make registration with the IRDA mandatory for all health care providers , including  NGO’S All private  employees should be mandated to provide  health care  insurance .

 The government should provide guidelines for social  insurance  and set up  pilot projects to monitor existing  schemes. there should be health care  insurance  products to meet the needs of various segments  of society. Developing  proper underwriting standards, effective, management  of hospitals, effective management of claims and offering  diseases specific covers for cost containment are necessary. Presently  the health care business is not attractive because  health care providers are not able to achieve even the viable margin of 3% for the loss Ratio is more than 120%.  To  streamline health care  insurance  in India , a working group has been constituted under the  aegis of the USAID (United States Agency) for International Development) to assist  to IRDA in developing  future policies on health care  insurance . This committee  is studying  a wide range of references.

GROUP TERM INSURANCE COVER

Group Life insurance is a comprehensive life insurance  cover that is offered collectively to a group. In this scheme life insurance cover is given to a specified number of persons under a  single contract, and the policy issued is a called the Master Policy. These schemes are generally offered to an employers  to enable him to provide life insurance security to his employees at a cheap cost. To cite from  LIC’s  documentation  of achievements  ‘Tryst with Trust’  there are no records to show  whether any group life insurance scheme was sold by a insurance companies in India before the formations of the Corporations. ‘Tryst with Trust’  further goes to record that the first ever group life insurance scheme in India was the one finalized by the Bombay region of the Corporation in 1957. The first group life insurance policy of India was purchased  by Unichem Laboratories fro a total sum assured of Rs. 1, 82, 000 for the benefit of 122 employee. 

Through individual employees  may receive a certificate from the employer mentioning  one’s inclusion  in the group scheme the parties  and professionals such as a doctors, lawyers, chartered  accountants  at all. Certain specified sections f the society   like co-operative  banks, welfare funds, credit societies  and weaker  sections of society  are also offered group insurance scheme providing uniform  cover the to the members. The basic feature of a group scheme is that as the group is considered as a single  unit, there is no individual underwriting  . On the other hand the underwriting is  a group underwriting. For the purpose of group underwriting  the company that offers the cover consider the insurability  of the entire  group and not that of the individual constituents of the group. Because of this, no individual proposal is received from the group members, and medical examinations is also  dispensed  with.

While considering a group for group insurance cover, the insurer considered the following. Movement  of group members new additions and exits to the group. The homogenous  nature of the group. Insurance cover should be incidental and not the main purpose of the group. As employers- employees   groups generally satisfy the above criteria  in a majority  of cases  group cover is offered  to the employees  of a company. To be eligible as a member was in of a group insurance scheme, the insurer may impose certain conditions. This is to ascertain the insurability of the member. The insurability criteria  may  comprise: Ensuring that the member  was in active  service  at the time of commencement  of risk under the scheme. Ascertaining that the member  had completed a stipulated  period of service with the employers.

 Leave on medical  ground had not exceeded  the stipulated number of days. At its discretion  the insurance company may waive any of the  conditions stipulated above. Once the insurer finds the group an acceptable  one, the group underwriting  exercise begins.. The group is not underwriting for any  unlimited sum. The insurer restrict  the sum assured of the risk  viable limit called  the Free Cover limit (FCL)  or No Evidence Limit. (NEL) . FCL is related  to the size of the group and the average  sum assured arrived on the basis of emoluments. 

When the underwriter decides the FCL as Rs. 5,000, it means that the members could be given group  insurance cover  without any medical examination  up to the that sum assured limit. If a cover is to be given group insurance cover without any medical examinations  up to theat sum assured limit. If a cover is to be given for than the FCL, Then the member may have to produce evidence of good health for the excess  of the sum assured ovre the FCL. The insurer may also impose a limit on the FCL for members  who are aged above a prescribed level. As a majority  of the group life insurance  schemes are based on the One-year Renewable  Group Term Assurance  (OYRGTA) plan, the premium charged is very low, thereby making the scheme appealing. The unique  advantage  of a group  scheme is that even persons  who are impaired and could not be considered for life insurance  under moral plans could be included subject to the member satisfying  certain simple tests of the insurability . An example is the group  insurance  scheme for the visually handicapped launched by LIC in 1991, at Nashik in association  with the National Association

 of the Blind. (NAB)

What is the Meaning of Micro insurance

While inaugurating the Sixth Global  Conference of Actuaries organized by the Actuarial Society  of India the International  Actuarial  Association  and the Federations of India Chamber  of Commerce  and industries  (FICCI) at New Delhi in February  2004, C S Rao, Chairman  of the IRDA, mooted   the idea of  reaching  the rural areas and the marginal segments  through the channel of Micro insurance . Micro  insurance is a comparatively  new concept in the Indian market. Micro financing  refers to finances that are made available  to the poor and other marginalised  sections of the community  to whom no financial  support or  insurance security  is available , either from banks or from  insurance companies .

Micro financing comprises micro-savings, micro-credit, and  insurance of property and lives as a bundle  of values. The concept of micro financing as an idea to alleviate poverty  was experimented  on a larger scale in our neighbouring  country , Bangladesh. way back in 1974,  during a great famine in the country the idea of forming a bank a for exclusive  micro-credit  to the poor was conceived by the Bangladesh  economist  prof, Muhammad Yunus. 

After protracted correspondence with the  Government  and the Central Bank of Bangladesh the German bank, as an independent bank  was born  in 1983. In Bangladesh  the Associations  fro Social Advancement (ASA)  had development  a micro-level  insurance plan in 1988, with the twin objectives  of insuring the loans of its members  and benefiting  their families in the event of death of the member.  The life  insurance policy that covers only death  is a self administered  scheme by the ASA. As this has  proved to be highly profitable  , the ASA has not tied up with any  other commercial insurer. BRCA, an acronym derived from Bangladesh Rural Advancement  Committee groups its members into a various voluntary groups. 

These members deposit  their savings regularly  with the organizations . The members are eligible for loans . BRAC has been offering  life  insurance cover to its member since 1990, under a micro- insurance scheme with no premium. However the renewal of membership at a nominal annual fee is a compulsory  to have the continued  benefit of  insurance. The  insurance covers  only death.  By the end of the decade of the 1990’s and the beginning  of the present century the phenomenon of micro-financing received global appreciation. Former US President  Bill Clinton pledged  to introduce the programme  in the first destination  towns of the migrants , viz, the inner towns of the US,  many presidential campaigns. In a 1997 global conference on micro-financing  , Us First Lady Hillary Rodham Clinton  described the concept  of micro-credit as a macro-idea . 

The Bangladesh   experiment  came to the notice of the United Nations Commissioner for Refugees, and under the aegis of the UN, many developments were initiated to spread the ‘Grameen , movement . Alternativa Solidaria of Southern mexico is another successful example in micro-financing , I India the efforts of SEWA (Self Employed Women’s Association) in micro credit  is gaining the attention of many.  Credit plus is a policy designed by Aviva Life  insurance company  to meet the requirements  to Micro Finance institutions  that offer financial support and financial security by way of loans to the rural and social sectors Credit plus an annually renewable group term  insurance plan that provides death covers to the group.

PROCEDURE FOR SETTLEMENTS OF CLAIMS UNDER FIRE INSURANCE

 When the subject matter of insurance  is lost or damaged in fire, the insured victim looks towards the insurance company  for rehabilitating himself. Generally  the following procedure  is adopted  while settling the claims under fire insurance. (1) NOTICE OF LOSS: First of all the insured , immediately  after the occurrence of a fire, has to send a notice of loss to the insurance company. This notice enables the insurer to take such measures  to determine the cause of loss, estimate the extent  of loss and deal with the salvage. This notice need not be in writing, it may be verbal i.e by telephone or personal call. The notice need out be given by the insured personally and may be given by on his behalf.

Notice given to agents does not discharge the insured from his duty unless expressly  allowed to do so and the failure  of the agents to transmit the message to  insurers, may give grounds for repudiation of liability.  (2) EVIDENCE OF LOSS: If possible the evidence of loss and other details such as time, place and circumstance under which the loss occurred, may be sent along with the notice of loss to the insurer. Besides  he should send particulars about the preventive measures  taken by the him during fire to mitigate  the loss. The duty of providing  full particulars and proof of loss  rests entirely upon the insured.  (3) POLICE REPORT IN CASE OF ARSON: In case, the loss or damage due to fire   is caused by arson (I e act of setting something on fire intentionally and unlawfully by an unscrupulous person), the matter will have to be brought to the knowledge of the nearby Police Station. Even if there is a slight  suspicion of anybody’s involvement in this arson, the same should be mentioned in the complaint  report submitted  in the police Station. The Police officials  will after making proper  investigation issue  a report. Such report has to be submitted to the insurer. If the fire-brigade was summoned, the brigade records should  also be produced with the insurer .

  

FORMAL CLAIM FROM: After having received the notice of fire loss a claim from is issued by the insurer to the insured and he is a requested  to return it after completing  and giving therein all the information about the loss. The claim form contains  the following information. (a) Name of the insured, Policy number and address. (b) Date, time cause and circumstances of the fire.  ( C ) Details of damaged property.  (d) Sound value of the property at the time of fire, where the insurance consists  of several  items, a declaration is required  of the values of each item under which the claim is made.  (e) Amount claimed after deduction  of salvage value. (f) Situation  and occupancy  of the premises in which the fire occurred. (g) Capacity in which the insured claims whether  as owner mortgage the like.  (h) If any others person is the interested in the property damaged, and. (I) If

any other insurance is in force upon such property. In case the amount of the loss is small and the claim issimple and straight  forward,. the insurer will admit the claim and send the cheque  in full settlement without  further enquiry.  (5) INSPECTION OF LOSS: If the loss is know or expected to be large and serious the  insurer will depute a independent loss surveyor  to ascertain the cause and extent  of loss. the surveyor, would inspect the damaged property or goods at the scene of fire and contact the insured his neighbours, employees and other persons connected with the fire and collect  the desired information .

This investigation  enables the surveyor  to have an idea of the nature and a extent of loss and origin and cause of fire. The surveyor  also prepares a detailed item wise list of the property or goods left at the scene of fire and get it attested by the insured  in order to avoid any attempt of exaggerated claim by the insured at  some large  stage. Besides the surveyor also carry out salvage  operations. I. e , the wreckage of the property or goods having some scrap value, will be taken into  the account to reduce the net cost of the claim. If the insured  wants to retain the salvage an appropriate amount is subtracted  from the amount of the claim. The damage and undamaged goods have to be separated in order to avoid   any further loss due to fire.

PRINCIPLE OF FIRE INSURANCE

 A fire insurance  contract just like any other contract is governed by the Indian Contract Act. In order to be valid it must posses the usual elements namely, offer and acceptance, competent  parties,  free consent and legal object and so forth. But in addition  to these essentials  it must also posses additional characteristics  of fundamental principles: The fundamental  principles of fire insurance are : (1) Insurable  Interest: (2) Utmost good faith: (3) Indemnity: (4) Causa proxima : (5) Doctrine of Subrogation : (6) Warranties and   (7) Contribution.

  (II)  INSURABLE INTEREST: An insurable  interest of such a nature that the possessor would be that financially  injured by the occurrence of fire and would be benefitted by its existence. The insured is not the property but the interest of the insured in the property. Thus what is insured in a fire policy is not the bricks wood, steel, cement, lintel  and other material used in a building  the house but the  interest  of the  assured  in the subject matter  house of insurance: not to the legal interest but the beneficial  interest. Without insurable  interest the contract  will be regarded as a gambling  policy and therefore void. A sentimental interest is not sufficient to maintain a contract of fire insurance. In short three essential conditions  must be fulfilled to constitute an insurable interest in the property viz., (a) There should be a physical object  capable of being damaged or destroyed by fire: (b) The object must be the subject matter of insurance:

 ( C )  The insured must stand in such relationship  as recognized by the insured is benefitted by the safety of the subject matter or be prejudiced by its loss.  The insurable interest in fire insurance must be a present at the time of offecting  contract and the at the time of loss . But exceptions are there. A businessman expect a consignment of goods. The time of arrival is not known. If they goods on arrival are under his risk, he can be insurer the goods. He can arrange insurance in advance . If the goods are lost before arrival are lost before arrival there is a no liability of insurer at all because the insured no insurable interest in the goods. Insurable interest is a  personal right of insured so it does not pass automatically with the property which means the buyer of insured goods does not get cover secured by the original  owner.

 But the legal heirs of insured get the insured’s right automatically . Insurable interest in fire insurance may aries as follow: (a) OWNERSHIP: Obviously this is the most common from but in additional as full ownership joint   ownership gives the right to insurer: (b) AGENTS: An agent may effect an  insurance on behalf  of his principal if he possesses an insurable interest. ( C ) ADMINISTRATORS: Executors and Trustees: They have a  right to insurer the property entrusted to them: (d) BAILEES: Bailees  are person  legally in possession of goods belonging  to other as for example repairman of a television  set while awaiting payment for his service charges or launderers  cobblers, pawn broken etc., They have insurable interest in goods left in their care and custody.  (e) 

HUSBAND AND WIFE:  Wife and husband have a mutual insurable interest in each other’s  property: (f) MORTGAGEE:  A mortgagee has an insurable interest in the property pledged as security for the debt.  (g) PARTNER:  A partner has an insurable interest in the firm’s property.  (h)  OFFICIAL RECEIVER OR ASSIGNEE: A official receiver or assignee has an insurable interest in case of insolvency of an individual or firm and.

PLAN YOUR GREAT ESCAPE ON A BUDGET

 Summer usually heralds  the beginning  of a lot off  fun things for Indian  families. Kids complete their academic year and look forward to go on a vacation with the entire family parents make elaborate  holiday plans to switch off from  work and spend time with their children. Some people prefer adventure holiday while  others would rather laze around the sunny beaches. You may even  ask every member of the family to vote on what type of the holiday they want and then zero in on a place that is according  to everybody liking . If you are in the mood to  spend some me time, minus the spouse the and kids,  you should book a sitter ask either your spouse, parents or friends to take care of the children while you are a away. This leaves you  free to plan a holiday according to your mood– be it a girl’s holiday out, or  a quiet  spa retreat.

PLAN IT WELL: You should  keep several factors in mind while planning your holiday. After  you decide  the destination, calculate the holiday budget. A  budget in general helps you control your spending habits and ensures that the monthly  expenses  are lower than the monthly income. A similar budget can be prepared  for a holiday as well, which includes all categories. Start by  reviewing  your income, expenses  and loan obligations and set aside  money for emergency  and set aside money for emergency  expenses . It is advisable  to prepare this budget before you plan for your holidays, so that you plan for your holiday, so that you know how much you need a to save  for the vacation . Put away money into a savings account in a advance on a monthly  basis. also  ensure  that you don’t  withdraw from investments  that are meant for other life goals.

  SET MONEY  FOR BUDGET: Depending on the  time remaining for the holiday, you can act accordingly . If the money into a  dedicated savings  account and so do not touch it until the holiday. If you have planned several months in advance then up put the money into debt funds or fixed deposits , so that you not only  have your holidays case, but also earn some interest on it while planning the trip. Some online sites give you the option to book with a token advance and pay the rest to the hotel directly.

INSURE YOUR TRAVEL:  Keep in mind that you need to take travel insurance  before you travel this can be done easily online on the portals of most insurance companies. There are various types of coverage  to insure onself against  the risk faced as a treveller. You can purchase this from insurance companies , travel agents, tour operators  rental companies or even travel assistance companies. The coverage , cost and terms vary widely   depending upon the policy purchased. Factor to keep in mind while purchasing  travel insurance.

A.  TRIP CANCELLATION INSURANCE:   This  protects you from the risk of cancellation  of trip due to unforseen events  are such as the financial  failure of the airline or  travel agency, bad weather , illness or death.  B.  TEMPORARY  HEALTH POLICIES: This provides short-term supplemental  health insurance coverage . This type of coverage may be helpful while travelling abroad ,. since  some health insurance providers  don’t  have coverage  for overseas travel and an\y kind of the  treatment in most places, can cost you a fortune.   C.  BAGGAGE INSURANCE: This  reimburses you if your personal belonging are lost stolen or damaged in travel.   D.  ACCIDENTAL DEATH AND DISMEMBERMENT  INSURANCE: This compensates and if you end up  being  disable or it compensates  your beneficiary  if you die in an accident.

MANAGEMENT OF THE HEALTH RISK

 In some ways the challenges  involved in personal health risk management are the same as those presented  for death and disability. However here there is another aspect to be considered  . The management of health conditions to maintain another aspect to be considered a financially  feasible/ optimum plan, This includes seeking out the optimum approach to funding health care costs, the most suitable  combination of medical aids, health insurance  etc.,   Increasingly this is being  combined with health cost curtailment  programmes such as a managed health care schemes.

  PREVENTIVE CARE:  There is a growing awareness  of the need to focus on the hesitant to offer cover for preventive issues. Indeed, it is only in the past few years that we have been seen some schemes including  repayments for costs associated  with sterilization or other birth control  measures, even though they were happy to meet  the heavier  costs of child birth. Similarly most of us would not expect to be able to claim the costs of a health club subscription from our  medical aids.
THE ROLE OF FUNDING:  Funding  involves three main areas:
 (1) ENSURING SUFFICIENT   FUNDS FOR APPROPRIATE  MEDICAL ATTENTION: Whilst   the simplest  form of this is a specially  ear-market savings account, the  danger in this approach lies in the possibility  that a fairly  large demand could be placed on the funds, early  on, before sufficient cushion  has been built up. Another issue is the fact that it is generally true the that some people are just ., Unhealthy mainly through genetic causes and for them the cost of funding  adequately could be the prohibitive. The normal solution  to these problems has been in the basic  concept of insurance  as applied in medical aid schemes pooling of the risk and cross-subsidisation.

  (2)  MAINTAINING  A CONTROL ON COSTS:   The system of health  treatment is such that it is sometimes  difficult to ensure that cost increases are genuine. After all without wishing to be disparaging of the medical profession, we find that there is often pressure  on them to make 100% sure that the treatment is totally  successfully  since patients, would otherwise have cause for complaint. There is a also  the simple financial matter that suggests that a practitioner should  seek to get as much out of the patients as possible, “ With the general lack of medical knowledge on the part of the most parents, over treatment is a define possibility  since that the matter is really out of the patient’s  hands and mostly paid for by the medical aid.  In all of this  there is a  need to the maintain  a balance between the care and the cost. For example surgery may be expensive , but if it cures the condition  swiftly and effectively , it may be ultimately  be a better choice than an alternative  prolonged half measure treatment.  However increasing  a new  perspective is being introduced in the so called new generation  medical schemes, where recognition  is given to the fact that there are some procedures where the patient does have control for example whether  to take a  minor ailments to the  doctor or to only for the chemist and so increasingly  the insurance  cover is being  offered only for the more major condition, where the patient is more relient on  the medical practitioner.

 Managed  health care schemes seek to the solve the problem in one of two ways-either through the introductions   of professional checks  by more than one of the practitioner either after than the  treatments or preferably  before or through arrangements  with specific   practitioners a or a group  of practitioners where a flat fee is a negotiated  for treatments  as a whole thereby  putting a the onus on the practitioner to provide the most cost effective treatment  hopefully without sacrificing quality.  (3)  ENSURING POST-RETIREMENT CARE: Most medical expenses are incurred  in the one’s  later year and there is an increasing  realization of the need  for  funding for this . However such funding has an impact on current expendable income. While pre-funding  through has an impact  savings schemes is one consideration another approach largely  confined  to several more advanced countries overseas, is that of frail care, where the individual contributes to a  fund during his or  her working life and in return is guaranteed suitable post retirement care

.  

PERSONAL CHOICE: You should  forget that medical attention is essentially  an intensely personal matter. People become  familiar and comfortable with certain practitioners  whilst it is also  fair to say  that we each have a  different value scale  when it comes to medical expenses. For example  one person may be happy to the pay the higher costs associated with a private ward at a private hospital whereas for another the general ward at a  Government facility  serves the purpose adequately. Whilst this  reality makes it important  to ensure sufficient choice, it is also necessary to ensure that certain people do not abuse any scheme unduly at the expense of others.

LIFE POLICY CONDITION AND POLICY

 A condition is a stipulation  essential to the main purpose of an   insurance   contract a breach of such condition gives rise o a  right to the insurer to repudiate  the contract. The conditions limit the scope of  insurance . Certain  conditions are only of informative nature to the assured. Generally   the conditions are printed on the back of the policy bond. The conditions attached  with Life  insurance  policies are as follows:

  (1) COMMENCEMENT OF RISK: The risk under a policy ordinarily commences on the date of receipt of the first premium  in full or from the  date of the company’s  acceptance letter whichever  is later and the second instalments of the premiums falls due on a date calculated from the   above date of commencement  of risks, if the acceptance  letter is a conditional one, the risk will commences on the fulfilment  of that condition.    

  (2) PROOF OF AGE: Age is the  very basis which governs  risk level and its pricing in life  insurance . Thus age is important for determining  the risk involved and the premium  amount. The life insurer will insist  on proof of age at the tome of submitting the proposal. The following  are considered  standard age proofs. (a) Certified extract from Municipal or other records made at time  of birth.    (e) Passport: In case  the age of the life assured at entry is found  to be lower than the age given the proposal from the premium shall be payable at the correct age and the excess of premium already collected with will be  refunded. If it is higher  than the age given in the proposal  the differences  between the premium for the correct  age and the original premiums already paid will collected  with interest. 

(3) PAYMENT OF PREMIUM: The premium rate is a calculated  annually, but for the convenience of the assured, it can be paid half-yearly, quarterly  or even monthly. It should  be noted that these premiums  are not just the portion  of yearly premium since the insurer losses interest on the unpaid premium  of a year and expenses  are involved for frequent calculations of premium. When premiums are not  annual but fractional and if death takes places  before all the premiums have fallen due for the current policy year, the insurer deducts  the  unpaid instalments  from the assured sum at the time of settling  the claim.

  (4): DAYS OF GRACE: To show consideration for the unintentional delay in payment of premium  on the due date a grace time is allowed  for paying  the premium on the  which is 30 days for yearly, half-yearly and quarterly  premiums and 15 days for monthly  premium. The days of grace means that if premiums is paid during the period of grace, no interest or fine is charged, it being  presumed  that premium has been paid when due. The rule for computation  has been that the day upon which the premium becomes  due and payable is not to be counted and the following day is the first day of grace.

LIFE INSURANCE IN INDIA

(1) EARLY DEVELOPMENTS: The early development of life insurance closely linked with that of marine  insurance. The first  life  insurers  were marine  insurance underwriters  , who started issuing  policies on the life of a merchants, master and the crew of the ship sailing along with the goods. . If a ship was captured, the insurer paid the ransom  needed to secure release of the captain  and the sailors . Life  insurance policies were granted during the reign of Queen Elizabeth. These early  contract took the form of temporary  assurance  covering  the life assured  for a short period onlyThe  first recorded life policy  was issued by on 18.6.1583 on the life of William Gibbons for 12 months  at the  rate of 8%  of 382,65.84 for which sum sixteen underwriters  were responsible. However this first policy was subject to a dispute  over payment because the policy holder died within 11 months of issuing  the policy. The underwriters  contended that the policy  period of 12 months  related to lunar months , which has expired.

Happily the court ruled that the payment must be made.  (2)  LIFE INSURANCE IN 18TH CENTURY:  It was in the eighteen century the societies  began of the  to be formed with the object of granting life  assurances . The Amicable  Society (1705)  the equitable Life Assurance Society. (1762.,), the West Minister Society (1792) were some important societies  .The application of the mortality  tables in 1755 by the Dodson and the introductions  of actuarial  science revolutionized  the whole concept  of life  insurance. As the life  insurance became better known, a practice grew up of speculating in lives,  particularly  of well-known  people, like kings, national leaders or prisoners particularly , if charged  with an offence that would call for capital punishment  upon conviction . The premiums varied with their reputation  and state of health. If person of this  category fell seriously ill a huge amount of the insurance  was written. In order to put  an end to this speculation with the  its attendant  evils,  an Act called  the “Life Assurance Act” (commonly known as the Gambling Act), was passed in 1774.

It prohibited all  insurance on lives expect those  satisfying  insurable interest requirements .  (3)  LIFE IN\SURANCE IN 19 TH CENTURY:  During the early years of the nineteen  century a large number of life  insurance companies were formed. A large number of companies  failed and many of them preferred  to amalgamate their business . In order to stabilise the business  further . Life Assurance companies Act 1870 was passed. Further Act was passed in 1871.   (4): LIFE INSURANCE IN 20TH CENTURY:  The above legislation  was repealed by the Assurance Companies Act 1909, which  was applied to all classes  of the  insurance business. Later on, various  acts were passed to meet the growing needs of the industry and to protect the insured. Some of these  acts are : Industrial Assurance  Act 1923,. Assurance Companies Act 1946, Insurance Companies Act 1956 and the Companies Act 1967.  (5)  LIFE INSURANCE IN INDIA:  In India an English  insurance company known as oriental Life Insurance Company started its operation in Calcutta in the year 1818. It insured the employees of East India Company  only. A good member of European  companies had entered the Indian scene by 1870, but mostly European  lives were insured by them.

Swedeshi  Movement started in the wake of freedom struggle  in India, gave birth to many Indian  insurance companies and some very important prominent Indian  names were associated with the life  insurance industry. In 1956, the life  insurance business was nationalized by taking over 245 companies and by forming one single  corporation  named as Life  insurance Corporation  (LIC) of India. Now Life  insurance Corporation of India and 12 private life  insurance companies are permitted to carry  on life  insurance business in India.

FUNDAMENTAL PRINCIPLES OF MARINE INSURANCE

 The following are the essential characteristics or fundamental principles marine  insurance  contract:  (1) FEATURES OF GENERAL CONTRACT: It comprises offer, acceptance, lawful consideration ands issue  of policy. Broker  prepares the slip after getting shipowner’s  instructions  merchant or other prepares . The original  slip is presented  to a Lloyds underwriters who initials the slip and it is accepted ,. The premium is determined on the  assessment of the proposal.

The premiums is the consideration . The broker then sends the cover  note with the terms and conditions of the  insurance .  (2)  INSURABLE INTEREST:  The insured should have insurable interest in the subject matter of the  insurance . When a man stands  in a pecuniary relating a money relationship with the   subject matter of  insurance , he is said to have insurable interest. Silence  marine  insurance  id frequently effected before the commercial transactions to which they apply are formally  completed. It is not essential for the insured to have an insurable interest  at the time of effecting  insurance   , he does not become entitled to indemnifications . Since the  ownership and other interest of the subject matter often change from hands to hands, the requirements  of the insurable interest to be present only at the time of loss makes a marine  insurance  policy  freely assignable.

However  there are two exceptions.  (a) LOST OR NOT LOS T: There is no bar to buy an  insurance  policy  even if they does not know about the existence of the subject matter. There is complete  reliance on mutual good faith of parties. If one of the parties knows  about the subject matter and does not disclose, then the contract is void.   (b)  P.P.I POLICIES :  insurance  policy itself is the insurable interest  in such a policy (policy Proof of Interest)  . If loss takes place, the insurer will not verify the insurable interest of the holder. These are not legally enforceable  through  insurers keep their promises.  The following parties may be said to have insurable  interest in marine  insurance : (a) Owner of the ship has an insurable interest on his ship and freight at as he is likely to suffer financial loss in case of an accident or loss of ship :  (b) Crew of the ship have insurable interest to the extent of their wages and salaries: ( C ) Owners of a ware houses nor any other bailee has insurable interest as he has certain responsibilities  for the goods: (d) A mortgagee of a vessel or a lender has an insurable interest to the extent  of his dues only:

  (e) Holders of bottomry and respondentia  bonds (contracts authorizing the captain of the ship to borrow money on the security  of the vessel or against  the security of the  cargo)  to the extent of their loan:  (f) The cargo -owner can purchase  policy up to the full price of the cargo. If he has paid the freight  in advance, he can take the  policy for the  full price of the good plus the amount of price plus the expenses of  insurance .  (g) The insurer under a contract of marine  insurance  has an insurable interest in his risk and may re-insure in respect of it:  (h)  Husband and wife have a mutual  interest in each other’s property  (1) The consignee  as also the consignor of any  consignment has an insurable interest in the goods.

4 Types Of Insurance Everyone Needs

FISH INSURANCE= This insurance is devised  for fish water fish rearers to cover stock of fry/ fingerings/fish / breeders of breads  like Rohu, Katla, Mrigal, common carp, Silver carp or any other recognized  breeds. SALIENT FEATURES: (a) The  insurance  covers  total loss to the  fish due to accident  or disease during the period  of insurance . The cover  includes loss due  ton pollution  poisoning  malicious act by  third parties  riot and strike. Political loss of any kind   is not covered.  (b) Flood and  allied risks are covered as an extension on payments of extra premium.  ( C )  The insurance  can be  also  be extended to cover the fish rearing pond bunds, sluices   etc., against  fire and natural  calamities on payments  of additional premium. (d) Policy is issued for the rearing period  subjects to a maximum period of 12 months from the date of stocking.

 LIFE IRRIGATION/ SPRINKLER INSURANCE:  This insurance  is suitable for the agriculturist  using the lift irrigation or sprinkler  installation for cultivation.   SALIENT FEATURES: (a) This insurance  covers  loss or damage to intake well, delivery  chambers, jack well, pump house, water storage  tank, pipelines, cables , starters and motors of the lift irrigation  systems or sprinkler installations  arising  out of fire, flood, earthquake, landslide , bursting  of pipeline and theft.   PLANTATION / HORTICULTURE INSURANCE:  This insurance  is suitable for individual farmer owner or tenant engaged in cultivation of horticultural  trees or plantations  or an associations organizations  and registered  body of farmers engaged in cultivation of specified crops. Also bodies registered  inputs procuring inputs, processing/ marketing of the produce can take this policy. SPECIAL  FEATURES: (a) Horticultural  trees/ orchards such as a citrus fruits (orange, lime, sweet lime), grapes, chikoo, pomegranate  banana and  plantations  such as a rubber, eucalyptus, poplar, sugarcane, betelvine , cardomon, sweet chilli, oil palm, teakwood, strawberry, tea , apple and coconut can be covered by this policy.  (b) The policy covers  loss or damage  due to fire, lightning  storm and other natural calamities  acts of terrorist  to fruits in respect of horticultural crops  and tree in case of  plantations.

  POULTRY INSURANCE: This insurance  is suitable for the poultry  farmers, the beneficiaries  of scheme sponsored  by the DRDA, DPAP, IRDP and financial institutions  providing assistance  to poultry units.  SALIENT FEATURES: (a) This comprehensive policy is issued to cover poultry consisting  of Broiler chicks/ layer chickens/ cooks and hens in the poultry farms. A minimum number of 100 broilers/ 500 layers  or 200 birds per batch  in the hatchery can be covered under the policy.  (b) The policy  provides  compensations  for loss to birds due to accident including  fire, lighting  flood, earthquake etc., diseases  contracted  or occuring during the period of insurance .  HONEY BE INSURANCE:  This insurance  covers loss or damage to Hive and Bee colony. Theft risk in covered  only on payment of additional premium. Sum  insured is based  on the cost of Hive and Bee  colony as given by State of Central Khadi and Village  Industries Board/ Commission. The rate or premium is 4% for loss or damage  to Hive/ Bee colony and 6% if theft extension is opted.   DOG INSURANCE:  This insurance  is applicable for indigenous  cross  bred or exotic dogs, watch dogs, which sheep dogs and   hunting dogs within the age limit of 8 weeks to 8 years . It covers death due to accident and diseases  contracted  during the period of insurance . The diseases  such as a rabies, canine, distemper, canine virus etc.,  is covered only if the necessary  vaccination certificate is submitted  . The maximum value of any breed should be not be less than Rs. 200 and maximum value of any dog should net exceed Rs. 2, 000 each dog.

 ANIMAL DRIVEN CART INSURANCE: This is a comprehensive  policy covering  the cart, the animal the cart driver  and third party  liability  (both TPPI and TPPD). The premium is 1.40% of sum insured per annum. The sum insured should include value of the  cart and animal. The animal however is covered against  accidental death  only. If death due to diseases  is to be a covered  a separate  livestock policy is to be taken.   HUT INSURANCE: This insurance  applies only to those huts used for dwellings and constructed in rural areas with financial  assistance from banking/ co-operative/ government institutions. It can  also apply to a selected area or cluster of huts for which proposal be referred to head office. It covers  loss or damaged due to fire, explosion of boiler  or gas used for the domestic  purpose only, earthquake flood etc.,

 GOBAR GAS INSURANCE (INSURANCE OF BIO-GAS PLANT) This insurance  is applicable  for khadi and village industries  workers artisans IRDP beneficiaries  and Scs and Sts and such other identifiable groups.. It covers loss or damage due to fire , lighting  riot, strike, flood, earthquake, subsidence, landslide (including  rockslide)  . The sum insured is the value of the plant (digester + gas holder+ constructions cost) depending  on type and cubic  capacity.

DIRECT MARKETING CHANNELS

Direct marketing is one of the most  successful  channels of distributions in the  developed economics. Direct marketing channel is also known as zero-level  channel. It consists of a company selling directly to the final consumer. In other words, service providers are more likely to visit corporate customers at their premises than to visit individual at their homes, reflecting the large volume associated with business to business transactions.

LIC has adopted the direct marketing  approach to develop the group  insurance market the direct marketing . As such it has succeeded in keeping the cost ratious  under group policies at very low levels. Private insurer are also engaging in direct  marketing to high net worth individual through channels like-work site marketing a relatively inexpensive  and easy launch potential distribution channel.   (II) AGENTS: The agent are the first line or grass-root workers of an  insurance company.  They do not take title to goods and service  and perform only a few functions. They are not no  on the rolls of the company and work as middlemen  between the  insurance company  and the customer. 

Their duties included. (a) Prospecting the clients: (b) Meeting prospective  clients to explain  and discuss different plans of  insurance. ( C ) Finalizing the sales.  (d) Forwarding the proposals to the company’s  office.  (e) Attending to the requirements  if any for the acceptance  of those proposals.  (f) Rendering post-slaes  services.  The role of the agent today is becoming  more and more important. He is no longer looked upon  as simply an agent but also asa financial adviser. Agent generated  sales of  insurance products  are predicted to grow by $ 11billion over the  next five years especially within the high net worth market. Though SBI life and Aviva India have successfully  sold their product through the banks  insurance channel they both feel the need to the extend their distribution sales and focus on the agency force.

 LIC, the monolithic organization  has an agency force of 9,02,199 during 2002-03 and the productivity  of each active agents stands at Rs. 19,51, 767. In case of ICICI prudential Life too, 70% of its business in the financial  year 2004 came through direct agency  force. This shows that agency force has immense potential  due to the fact that many of the  insurance products  are highly complex and the selling of the these  complex products require greater knowledge and understanding  . These products can better marketed through certified  insurance facilitators or agent:  (III) BROKERS: With the introduction of broker regulation this could be the next hope, especially for the urban market. This will be a new experience  for the  insurance customer accustomed  to brokers in financial services  real state and travel and  tourism.

 For historical reasons. the image that broker carries  in the minds of the customers is not favourable. Thus the new breed of  insurance brokers  face the challenges  of establishing  credibility.   They seek to determine the best fit for the client and can effectively  address the mental block faced by the public about various companies. This is applicable in the case of the life  insurance for the high end corporate group segment