INVESTMENT OF FUND

 The Fund or  reserve is the liability of the company  towards the policy holders and the company invests  it to earn the   assumed interest  . The Fund  is not an extra  amount  to meet contingencies , but it represent the accumulated  liabilities  of the insurer to wards  policy holder  and it is a  to be a kept as  trust money. The supreme  consideration  in the investment  of life Fund is to preserve the interests  of the policy holder. It is a basic that in handling  trust funds, the  trustee shall in no way profit  personally  there from. Every effort  should be made to protect  the  assets  of life insurance assurance from any element  of fluctuations, wide swings in market value, losses growing out of the sale of security on an u unfavourable market and speculation for profits. Great care has to be taken in selecting suitable channels of investments and supervising them. Life insurance companies  keep organized departments  to handle the tremendous  volume of business occasioned by the investment  of reserve funds. Experts are constantly the market outlet  for funds and, through an analysis of economy and financial condition are able to forecast investment trends. However  the life insurance company officers must observe complete good faith and should  formulate an investment plan in conformity with the following canons of investment.

  (1) SAFETY AND SECURITY: The investment should comprise  the permanent integrity of the capital so as to avoid so as to avoid the violent and frequent  in the value of securities. Accordingly  every insurer carrying on the business of life insurance is required to invest the life fund in the following manner:  At least 25% in Govt. securities. Another 25% either in Govt. securities or other approved securities. Another 35% in the approved securities such as a  immovable property preference, equity shares, etc., Another 15% investment in other invested  in such a way that they may be readily convertible whenever claims are payable. To ensure that they are may the proper degree of liquidity , investments, are so made that the maturities will occur at intervals adjusted to meet the needs of a maturing policies. As a provision against sudden to demand  for surrender values or policy loans, the insurer may keep a part of the fund in cash or in a such securities which can be realized quickly and without loss. This could be used to meet a sudden contingency or to avail of an exceptional investment opportunity. 

  3.  PROFITABILITY: The insurer must earn at least the assumed rate of a interest other wise  there will be a loss. The investments should be a made in a such securities  which can be yield the highest  return but not at the cost of the  safety. It has been realized that safety and profitability are opposed to each other and so a fair and a true  balanced policy of the  investment should be a observed.  4. DIVERSIFICATION: The investment of the funds should be diversified . It means spreading over investment among different classes of securities so that risks and return are adjustments . The diversification  can be according to time factor . It provides  maximum security and yields and an efficient rate of return. So the principle of “  not” having all the eggs in one basket: should be adopted.   5.  AID TO LIFE BUSINESS: The funds should be invested  in those  projects or activities which may provide more employments opportunities  and may also increase the standard of living of the people so that the insurer  can get the benefits of the lower mortality rate and increase in new business

FUNDAMENTAL PRINCIPLES OF LIFE INSURANCE

  The essential elements that are required for creation of a valid contract such as offer and acceptance, competencies of the parties to contract, free consent of the parties, legal object and lawful consideration is applicable to life insurance contract too. In addition  to these the life insurance contract should be based upon four  important principles such as a  utmost good faith., insurable interest warranty and causa proxima.  

(1) OFFER AND ACCEPTANCE: There are at least two parties to life insurance contract insurer . The proposal submitted by the proposer  for life insurance is the offer. When it is a accepted absolutely and unconditionally  it is a converted  into a contract. If the insurer on considering a proposal  decides that it can be accepted on terms  other than a  as proposed, he informs the proposer the modified terms. This is called a counter offer. It is now for the proposer to accept the  modified or counter offer. Once he accepts such counter offer absolutely and unconditionally a contract  comes in to a existence.  (2) CAPACITY OF PARTIES: The essential of “ Competency” applies more to the proposer  than a life insurance company. A proposal from a minor is not entertained by an insurance company. But under certain the company may issue a policy on the life of a minor . But in such case is a  the contract will be the with the guardian or parent because a contract creating only rights or property in favour of a minor  is valid.  (3) FREE CONSENT Freeconsent is present  only when parties agree  on a thing  in the same sense. If the consent is obtained by such means, I ,e, by coercion, undue influence  fraud, misrepresentation or mistake  then that will not be called free consent .

 A person  whose consent it is a  not freely  obtained may avoid or cancel the contract if he desires. Importance of free consents and agent: Where a person signs a proposal he gives his consent. But when the signs in a vernacular or a language different from that the  of form, he must declare in his own hand that the contents of proposal were explained to him and he has a  signed the proposal after fully understanding them. The witness to the  proposal should also certify that he has explained  the contents of the form to the proposer only than the consent is considered to be free. Agents are advised to be a careful that proposal for assurance is given by the proposer with a  free consent and agent  should be not adopt unfair practice.  (4) LEGALITY OF OBJECT: It is a very much essential in a  life insurance contract . The life insurance contract should be not be based on a mere gambling instinct and the object of insurance and premium consideration  is not fraudulent immoral and forbidden by low.  ( 5) CONSIDERATION: Consideration is a something that moves from one party to the other and in return  for that party fulfils  his part of obligation e. g. premium is a consideration and is paid by insured a to insurer to bear risk of the insured’s life.  (6) UTMOST GOOD FAITH (PRINCIPLES OF UBERRIMAE FIDEI) The contract of life insurance requires utmost good faith on the part of both the parties so that the person  undertaking to shoulder the burden or risk may correctly ascertain the true nature and extent  of it before  fixing its price. They must  make a full disclosure  of all the facts material to the risk. The words material to the risk mean any fact concerning the health condition or physical history of the applicant which may influence  the insurer in determining  whether to issue the policy.

Fire Insurance Policy Types

MEANING OF FIRE INSURANCE:. The Fire Insurance  shift the burden of fire losses from  their actual victims to all the members of the society. It is a co-operative device to share the loss. It relieves the insured from the horror of the fire losses to which he is exposed . The insurer undertakes ti indemnify the insured  against any loss due to fire caused to the property insured in considered  of premium paid by the insured. Thus fire insurance is the handmaid of the commerce as it is the concerned with the protection of capital  and business properties. Business properties like factory building, godowns finished and semi-finished goods and the like cannot be said to the be immune from fire risk. Protections of properties from fire is indispensable  for the continuity of any business. Fire Insurance provides  timely financial help in case of loss of insured  properties. It also provides for the consequential  loss including profit due to the interruption of business on occurrence of fire: 

DEFINITION OF FIRE : According to the above definitions  of fire insurance, the losses to the property by fire are covered. The meaning  of the word, Fire” should be clearly understood in order to make the insurer liable under the contract. For this purpose a fire  must satisfy  two condition : firstly  there must be actual fire or ignition: and secondly  the fire must be fortuitous  in its nature.  (1) IGNITION: The first condition requires that there must be actual fire or ignition. In a case Byles J. said “The  expression  in the policy  we have to construe  is loss or damages occasioned by fire”. These words are to be construed  as ordinary people would construe them. They mean loss or damage either by ignition  of the article consumed or by ignition  of part of the  premisses where the article  is: in the one of the case there is a loss, in the other a damage occasioned by fire”. Loss or damage caused by  excessive fire heat cannot be included in loss or damage by fire, All that is necessary  to prove in the case of Fire insurance is that the loss is caused by fire. The cause of fire is immaterial. Even if the fire is caused by the negligence of the servants of the insured or of himself, the loss is covered. Of course  there should be no fraud or wilful misconduct by the assured.  If the proximate cause of the loss or damage is fire, the insurer is responsible  but, if the loss occurs  not by the actual  ignition  but buy  a process resembling fire, it is not regarded  to be a loss by fire. For this reason  smoke damage which arises from a faulty chimney.  or from the scorching of articles  by overheated irons  or being  placed too near to the fire, does not fall within the scope of a fire policy. Loss or damages by explosion is not a  loss by fire. The word fire does not extend to chemical actions, which though they may correspond in this the effect to fire. do not result  in actual ignition. Similarly loss occasioned by lightning  without ignition  is not a loss by fire: but where lightning  results in the ignition  the loss caused by such ignition  is a loss  by fire and can be recovered from the insurer. 

FIRE SHOULD BE  ACCIDENTAL AND NOT INTENTIONAL: The second condition stipulates  that the fire should have been accidental and not intentional. Any loss caused by a fire lighted  purposely for some use is not a loss by fire it is was intended. But there when property is accidentally burned in an ordinary fire, such as a domestic fire, the loss is covered even if they the fire remains under control. Here something is burned which might not to have burned. Similarly when a  fire is purposely lighted  but later on it escapes control and causes loss to the property the loss is a loss by fire and is recoverable under the contract..

How To Make Sve Life By Insurance

Evised by firms that safeguard the interest of the client. There are several insurance companies that offer  different types of insurances. There are several life insurance companies and general insurance companies offering different services to the clients. The  insurance requires the customers to pay a certain  insurance fees for a specified period of time. The mode of payment and the nature of compensation depend  upon the  insurance policy a person buys. There are many players and several packages being offers  to the customers.  Insurance marketing is very vital for the success of  insurance companies and to attract customers  to the  insurance policies. But the Indian  insurance players face a lot of difficulties  in marketing their  products. People of India do not show interest  in buying  the policies of different players. They do not find any immediate benefit by purchasing policies  of both life  insurances ane general insurers. Some general  insurance policies are purchased  because of legal compulsion as for instance  motor  insurance or transit  or fire  insurance as a precondition for bank credit. Life policies also may be very rarely purchased compulsorily as a collateral for a housing  or educational  loans. Barring these minor exceptions, Life policies are always sold and not purchased willingly for the following reasons.

  (1) Life  insurance is intangible and not tangible  like a washing machine  or a bath soap which are needed and which give instant satisfaction. The satisfaction in life  insurance comes after a long period to the customer when it meets some specific money milestones in his life such as a marriage or own retirement  or is of immense benefit to his family in case of his early death. Many do not understand what life  insurance does to them or their   family. They never feel it as a need as they seldom realize that the suddenness of untimely death is a  very likely event in their own lives. The agent has to explain this situation in an acceptable  manner to uncover the need and to convert it into a want so that the customer buys it immediately.  (2) There is always a tendency to defer the decision even when the need is accepted as the possibility of death is very often ignored or not realized as imminent. The pressing requirements of today takes the front seat pushing the life  insurance providing  to the back seat or for a tomorrow that never comes.  (3) Religious and cultural beliefs, conservatism, the usual fatalistic attitude of leaving every thing  to fate of God all these come in the way of the purchase of life  insurance.

 (4) There is a strong notion that life  insurance is a not a good investment by making a improper comparisons. (5) People do not know that life  insurance can be purchased  only if they are in reasonable  good health and it is not granted if they are in bad health. Life  insurance may become impossible when they finally decide. (6) The idea of  insurance requires personal explanation  of the benefits and features by an agent. Every prospect has a  different  need and there are policies suitable  for each need. (7) Purchases  of life  insurance involves a long a  term  commitment  putting aside considerable  amount of money  regularly for a benefit  which rather vague  and far a and in taking the decision  the agent has to play a big role.  All these reason  make  insurance marketing difficult and different  at the same time. In order to attract the potential customers  to the  insurance company and to earn more revenue by selling more policies , the  insurer  will have to adopt  certain  marketing strategies with regard  to product  the insurer will have to adopt  certain customer service management. Before we discus in detail about the marketing strategies  of Indian  insurance players, let us first understand the concept of  insurance market and  insurance marketing.  

CONCEPT OF INSURANCE MARKET: The term market refers to a place where sellers and buyers sell and buy goods  directly or through intermediaries. According to the Federation of  insurance Institute, Mumbai the term Insurance Market comprises the insurer, buyers and intermediaries who bring  the two together. As such like other commodity or service  market an  insurance market also consists of three parties i.e, (1) Seller: Insurance companies or insurer: (2) Intermediaries: Insurance agents or brokers or bankers: and (3) Buyers: Insureds of prospective buyers. The key players sellers in the Indian  insurance market include: In public sector: LIC of Indian, National Insurance company LTD., Oriental Insurance Co. Ltd., New India  assurance Co. Ltd. and United India Insurance Co Ltd.,   IN PRIVATE SECTOR: Bajaj Allianz, ING Vysya , SBI Life,

CONCEPT OF INSURANCE MARKETING: The term Insurance Marketin refers to the marketing  insurance services with the motto of customer orientation and profit generation. A fair blend of profit generation and customer satisfaction  makes by the way for development and expansion. The  insurance marketing focuses on the formulation  of an ideal mix for the  insurance business so that the insurer survive and thrive in a right perspective. The quality of services  can be improved  by formulating a fair mix of a the core and peripheral  services. The persuasion process can be speeded up with the support of creative can be made  promotional measures. The premium and bonus decision can be made3 motivational the gap between the service promised and service offered can be bridged, the quality and value based personnel  can make performance-orientation possible  and these developments can make the  insurance organizations strong enough to face the challenges and threats in the market, . Thus the marketing concept in  insurance business focuses on the formulation of marketing mix or a control over the whole group of marketing  mix or a control over a the whole group of marketing activities  that make up an integrated  marketing strategy. From the above the following facts regarding the concept of  insurance marketing are derived. (1)  It is a managerial process. (2) It is a conceptualization    of marketing principles .(3) It is a  process of formulating the marketing mix.  (4) It is a device which makes consumer  orientation possible. (5) It is an attempt to help profit maximization . (6) It is even a social process that paves a avenues  for social transformation. (7) It makes the products  attractive. (8) It is to energies the process of quality  up gradation.