This book promotes in detail information on all types of insurances?life, non-life and health insurance for the common man, who can subscribe to any of the above types. Written by a professor and director of Insurance Academy, a premier professional institute in insurance training at Pune, this book stresses on the need for people buying insurance voluntarily rather than being compelled to do so, if the Indian business industry is to reach global standards. For a large section of the population, insurance does not occupy a prominent place in their agenda because they look at insurance with disdain, claiming that they are above the risks that insurance seeks to protect. The basic reason for this is their lack of understanding on the basics of insurance, says the author.
Life is extremely hazardous and full of competition for which it is necessary to have insurance. If something unpleasant was to happen to us, then our family would be left without any support; or if we were really seriously ill, then the family needs to have economic protection. Insurance aims at providing a proper pension or taking care of our health in old age. Undoubtedly an early or untimely death is a great risk, but a long life too is a serious risk when fewer or no sources of income are available in old age, making life very difficult.
This entails going in for insurance which means paying a certain amount for a certain time and getting back a certain amount of money after a certain period. As such, other types of insurances, like home insurance, travelling insurance, vehicle insurance, goods insurance, anti-burglary insurance, etc. are the policies that help to prevent the policy holder from becoming poorer.
Not many would know that the first insurance policy was issued in 1347. The Lloyds Insurance Company was founded in 1688 in a coffee house, which became a meeting place for ship owners, businessmen and insurance companies. In India the insurance profession began in 1818 when the Oriental Insurance Company did business only with the British. Later it started doing business with Indians as well but at a premium higher by 15 to 20 per cent. Angry at this discrimination, six Indian businessmen got together in 1870 to form the Bombay Mutual Life Assurance Society. In 1909, Ishwarchander Vidyasagar, the famous educationist, formed the Hindu Family Mutual Fund, an insurance company which provided pension, the first of its kind in India. By then motor vehicles had begun to ply on roads and this created the new problem of vehicle accidents. Thus the accident insurance was born.
Despite nationalisation, insurance did not reach everywhere, particularly the rural areas and the weaker sections of the society The administrative expenditure of insurance companies was burgeoning?out of the yearly premium collection, 25 to 30 per cent was spent on administrative and other expenses. So in 1999, Parliament passed the IRDA Act to establish the IRDA (Insurance Regulatory and Development Authority) which exercises control over all insurance business in the country, just as the Reserve Bank of India does on the banking sector.
Insurance ?is basically a protective umbrella?, a warm blanket of economic security, necessary for a secure life. Insurance in other words, is the armour that provides certain security from the uncertain risks. Another advantage is that it gets one into the habit of saving money
The book goes on to explain how the insurance profession works in providing social security, the rules and regulations of insurance, principles of insurance, the types of insurance, how premium is calculated and how to gain advantage of life insurance.
(Macmillan India Ltd, 2/10 Ansari Road, Daryaganj, New Delhi-110 002.)