Many Types of Insurance Policy

   SPORTS INSURANCE:  This insurance is available for amateur sportsmen only and not for  professional sportsmen covers sports like, Angling, Badminton, Cricket, Golf, Lawn tennis, Squash and use of sporting guns. It indemnifies  the insured  in respect of the following:  (a) Loss of or damage to sporting  equipments accessories etc., (b)  Loss of or damage to clothes and belonging  caused by fire , burglary, house breaking or theft. ( C ) Legal liability of the insured and named members of the insured’s family, to the public, while engaged  in practicing the sport.  (d) Accidental bodily injury to the insured and to the named members of the insured’s  family whilst engaged in or  practicing  the sports.  

  2.  OIL AND ENERGY RISK INSURANCE: This is also  known as off-shore insurance. Insurances are granted for: (a) Mobile off-shore  drilling units (drill ships and rigs). (b) Off-shore platforms for productions  and processing . ( C ) Associated pipelines, cables etc., These policies issued in Marine Hull department are granted  to Oil and Natural Gas Corporation which is engaged in oil and gas exploration  and production at sea.  (a) Insurance of aircraft against  loss or damage.  (b)  Insurance of legal liability  to third parties and passengers.  ( C )  Insurance of legal liability  for freight, mail etc carried.  (d)  Insurance pilots crew and ground staff against  personal accident risk.  (e)  Insurance   of pilots  and other crew against  loss of professional licence.     

3. SPECIAL CONTINGENCY POLICY:  This policy covers the risk relating  to machinery and or equipment or any other property. The rate of premium charged varies from 1 % to 2% of the value of the property to be covered. A new type of a special contingency policy has become popular in the recent year. This  relates to total abandonment of one day  cricket match due to specified perils. These perils being fire, lighting  explosion,  earthquake, rain, riot, strike etc.,  This policy  cover the actual financial loss suffered  by the insured i.e., the organizers . The insured has to establish the extent of loss by the submitting an audited accounts. It is a condition  under the policy that no liability  will attach event a if a  single ball is a bowled. It should  be noted that once a match thus commences, subsequent,  abandonment would be noted constitute a loss. Similarly changes in venue or postponement of the match does not constitute a claim. It is prescribed that the tickets issued shall contain a stipulation that once a ticket is sold, no refund will be allowed. 

  4.  CREDIT INSURANCE: Credit  Insurance comes in a variety. Typical credit  Insurance coverages included  credit life, credit disability, involuntary, unemployment, and credit property  Insurance. Separate coverages  such as those listed above often bundled  together and marketed as one packaged  product. Credit   life  Insurance is a type of life  Insurance that effectively pays off the debt  you owe on a credit account or mortgage in the event of your death. The payment from the  Insurance company reflecting the pay off balance of your account or loan always to the lender who is a named  as the  beneficiary of  the policy . You  cannot name a spouse, family member or friend as a beneficiary for a  credit life  Insurance policy. Credit Disability  Insurance helps to a secure your favourable  credit rating by covering  your minimum  monthly  credit account payment during a period of documented medical disability. Since it is a common for policies to contain a maximum time period for continuing payment benefits , it is likely that your entire balance will not be paid off. Morever, as interest and  Insurance charges continue  to add up throughout  the period of your disability, it is possible that you may be owe more money on your account after your disability  than you did before, depending upon your original balance,  Generally you will not be covered for any additional purchase  made after the onset of your disability. Involuntary unemployment   Insurance, like credit disability  Insurance, makes your minimum monthly  credit account payment during a of a involuntary unemployment, such as a lay off or down sizing. The limitations noted with credit disability  Insurance as defined above a are also applicable to involuntary unemployment  Insurance. It is a possible that your entire balance will not be a paid off and it is possible that your may owe more money after unemployment ends than did you before even, though the  Insurance company was making your minimum monthly payment. Credit property  Insurance cancels  the debt you owe on items purchased on a an insured credit account if the property purchased is destroyed by the specific  named perils such as an accident theft, flood, or  earthquake. Unlike most property  Insurance, you do not he  not have a to pay a deductible up-front when submitting a claim. Deductibles are not used in credit  property  Insurance.  5. STUDENT SAFETY INSURANCE: This  Insurance is issued on similar lines to personal accident  Insurance. It is meant for children going to school, college and other educational institutions. It covers death or the to the permanent disablement due to accident. The sum assured ranges from Rs. 10,000, to Rs. 10, 00, 000 . The benefits offered to the insured are as follows.

NON MEDICAL SCHEME

The practice of accepting  insurance without a medical examination ( I.e.,  non medical) became established  in the UK in the 1920’s. Eventually this practice spread to North America. For many years, non0medical medical history question are asked by agent rather than a  doctor was limited to smaller amounts at the ages of 40 under , but due to favourable  experiences, it was extended  to quite large amounts in the early 1980’s The term non-medical should not however, be taken to mean that  insurance is issued without any medical  information. Medical information is sought from the proponent directly  and in this regard, there is an additional responsibility  on the proponent to be totally fair and frank. Here the agent also plays an important role as his role as the primary underwriter is brought into play  because of his close intimacy with the proponent  and knowledge of any additional adversity in the proponent’s  health condition. There are many reason for accepting applications  without medical examination.  (a) There has been a growing  realization in the  recent past that a medical examination is not indispensable  because it is known from experience that it brings out the adverse feature in not more than the a tenth of all the applications received. (b) The slight increase in the claims can well be compensated for by the saving of medical fee and other procuring  expenses.

 ( C ) In our country more than 75% of the population is in rural areas. It is difficult to have competent  medical examiners in these areas to conduct the medical  examination for the purpose of life insurance. This is a more true in respect of lady medical examiners.  It is also difficult to bring applicants to nearby  towns for that purpose, which will also be prohibitively  costly.  (d) Where the applicants are employees of an institution which insists  on standard age proof and a medical examination  at the time of a entry in to service and also maintenance of regular  leave records, medical examination can be dispensed with.  (e) The effect of selection by medical examination for life insurance on the rate of the mortality is limited to a few years after acceptance of the application may be a year or two. There could be some extra death during the period, which can be compensated by  savings of medical fees. In view of these reasons, if some safeguards can be  designed and adopted it will become possible to considered  applications  without the necessity  oaf any medical examination. The following  condition are generally employed.:  (1) Application form may be more elaborate and may included  a personal statement. 

The applicant will have to furnish his/her physical measurements like height and weight (LIC of India has built the tables which gives the range of weight for each age and height-minimum and maximum for consideration  of applications  under its Non medical  schemes those beyond  are considered subject to medical examinations.  (2) A detailed  report of the field worker is also called for in a which,  after making careful enquiry, the agent will have to  furnish details of the health habits, personal and family history,  financial position of the applicant to avoid moral hazard.  (3) There can be certain restrictions regarding  age at entry types of products  offered maximum maturity age, maximum sum assured etc., (4)  There can be more restrictions on allowing non-medical scheme to female lives.  (5) The insurance company can always reserve its right to call for a medical examinations in any case. LIC of  India has introduced two different  schemes: (a) Non-Medical special scheme, and (b) Non Medical (General) scheme. They are discussed in detail here 

LIFE INSURANCE PREMIUM SETTING: The insurer collects contributions from a large number of individual to compensate the financial consequences  of the loss of the unfortunate few. This contributions  is known as premium. In other worlds, premium is the price paid to the insurer by the insured fro underwriting  risk. There is a rate for each type or insurance. The rate of premium depends upon the  risk undertaken by the insurer,  expressed generally per hundred  or per thousands  of sum insured. It can be paid either in one lump sum  or in easy periodic instalments like monthly, quarterly  half-yearly of annual. The manner of a payment usually annual and the payment by monthly or other instalments  usually involves slight extra cost. 

TYPE OF PREMIUM: The determination of life insurance premium is one of the most technical  and a difficult aspects of the branch of actuarial  science which requires a broad knowledge  of science of mathematics and satistics The premiums can be classified into the following heads: (1) Net  premium. (2) Gross premium. (1) NET PREMIUM: This premium  is mainly based on the past experience  mortality and assumed rate of interest. No consideration is given for expenses incurred  and for future contingencies. The net premium should be equal to the claims paid other on the death or due to the maturity of the policy.  (2) GROSS PREMIUM: It is also known as the “office premium”  It is the amount that the life assured is required  to pay. It includes  the mortality rate, the assumed rate of interest, the expenses and loading  . So if expenses and bonus to policy holder are added to net premium it becomes gross premium. Gross premium =  Net Premium + Expenses + Loading.  The premiums mentioned above may be further classified  into two parts. (a) Net single premium: and. (b) Level premium.  (a) NEWT SINGLE PREMIUM: This premium is received  by the insurer in a Lump sum and is exactly  adequate, along with the return earned thereon, to pay the amount of claim. It does not provide for expenses of management  and for contingencies. Net single premium = Mortality cost + Loading --Interest. The computation of net single premium rates on any kind  of policy requires the information as to.  the age  and sex of the assured  since rate must be commensurate with age and sex. the type of policy, for the rate depends on the type of policy. The size of the policy, for the  rate depend on the amount of assurance or the amount of the claim guaranteed and the rate of interest  assured fr investment made by the insurance company.  (b)  LEVEL PREMIUM.: Due to financial constraints, some insured may find it difficult  to pay for this their life insurance  on a single premium.

MARINE POLICY CONDITION OR CLAUSES IN A MARINE POLICY

In order to satisfy the varied requirements of the insured suitable condition are incorporated in marine policy. These condition are the clauses  which are found in the policy. There are many conditions under which a policy is issued but we shall discuss below the most important among them:

 (1)  NAME OF THE INSURED: In marine policy,  the opening words are following by a blank space which are is used for the name of insured or his agent. If the name of is not inserted in the policy, the document will not be a considered as a marine policy. The names of those persons, who have an insurable interested in the subject matter insured alone should be inserted  in the policy. In the past in some of the policies the opening words were “ In the name of God”, such practice does not exist any longer. (2) ASSIGNMENT CLAUSE: According  to this clause, a marine policy is a freely assignable unless this is expressly prohibited. The policy may be assigned to any person who has insurable  interest or who may acquire it at some later date. Generally, cargo policies can be assigned freely without giving prior notice to the underwriter insurer but in case of the hull insurance, the policy cannot be  assigned freely and the consent  of the underwriting  is essential because the degree of risk of the subject matter is the materially  altered when the management and ownership of the vessel is changed. As  the cargoes on ships change ownership  several times before they finally reach the port of destination  the assignment of a cargo policy is to be done by means of the blank endorsement i.e, by putting the signature of the insured or his agent if the policy is in the name of the agent. On the contrary, the hull insurance policy should be assigned only by means  of specific endorsement. It is interesting  too note  that marine policy can be a assigned  even after it takes places, but the assignee cannot be a get a better title than the assignor.In marine policy was that sometimes the merchants receive information of shipments of their cargoes very late, particularly  after the sailing of the steamer. In such cases therefore both the parties viz. the insured and the insurer were ignorant about the safety or otherwise of the subject matter. In order to provide  protection to the merchants for such shipments the Lost or Not Lost Clause has been inserted  in the policy which makes the insurer liable to indemnify the insured  whether  the subject matter before the date of issues of the policy has already been lost in the way or not lost. The inclusion of these words makes the policy effective  from a retrospective  date and covers any loss which might have occured  between the period of shipment of the date of issue of the Policy.

  It is quite obvious that the clause pre-suppose complete reliance on the principle of good faith on the part of the parties. If at any point of time, it is proved that one of the parties, was in possession of information about the safety or otherwise of the subject matter, the contract of marine insurance  will come to an end. For example if the insurer at the time of taking the policy knows that the good have already reached  the port of destination safely or the insured aware that the goods have been destroyed  on the way, then in both the cases, the  policy will be declared  void an account of concealment of fact. This clause  was most prevalent in olden times when communications network was not so developed. But now this clause has lost of much of its importance. 

(4) AT AND FROM CLAUSE: This clause describes the point  of times from which the risk commences and is generally applied to hull and frieght  insurance. When a ship is insured “at and Form” a particular place, the risk commences as soon as the ship is  arrives at the port safely. It means that the  policy covers the subject matter while it is lying at the port of the departure  and from the  time the ship sails. For example, if they  policy contains the words, “ at and from Chennai it means that the subject matter is covered under the  policy up to the time the ship stays  in Chennai or any time it leaves the Chennai port. In case the  policy contains the word “From” instead of at and from the risk of covered  only from the time of a departure and bot prior  to that. For example if the  policy provide. From Mumbai, it will imply that the  insurer is liable for any loss or damage arising after the ship has sailed  from the port of Mumbai and not before that. In case  of goods, the risk commences from the time they are loaded on a the vessel and insurers are not responsible for the loss while in transit In lighters and crafts from the shore to the ship. If the place of departure is specified by the  policy and the ship sails from other place than the specified one, the risk does not attach.

KINDS OF MARINE INSURANCE POLICIES

Different  kinds of marine insurance  policies have been introduced to cover a large number of risks including sinking and burning of ship, stranding or going astray of the ship, accident, collision of ships, jettison, piracy, explosion, sea decoities, stormy winds causing losses to the ship and cargo and many other perils of the sea. These policies  contain detailed information about the subject matter insured  risks covered description  of voyage, terms of insurance, premium etc. The following are the major policies issued under marine insurance: 

  (1) TIME POLICY: When a policy is taken a definite  period of time, it is  called time policy for example a policy insuring  the ship from 1.1.04 to 31.12.04. This policy may pursue any course it likes the policy would cover all the risks from the perils  of the sea for a stated period of time. Generally this policy cannot be issued for a period exceeding 12 months . However this policy may contain  a  “continuation clause” providing  that if at the end of the period the ship is yet at sea, the policy will continue for a reasonable time there after till the ship arrives safely at the port of destination. It is to be noted that if the risk attaches  under the continuation clause  a fresh policy duly stamped covering the period in question must be a taken before the insured  can claim any loss under the policy. This policy is commonly used  for hull insurance though it may be taken out also for movables and other goods when small quanties are involved.

 (2) VOYAGE POLICY: When the marine risk during a  particular voyage only a covered under a policy it is called voyage policy. For example a policy insuring cargo for a voyage from Chennai to London. This policy is more suitable  cargo insurances  as cargoes  are in danger of destruction from maritime perils during the period of the transportation. Since this policy  covers the risk in transit, it is not suitable for hull Ship insurance as the ships generally do not operate over a  particular route only. (3) MIXED POLICY: A policy which combine  the features of voyage policy and time policy is known as a Mixed policy. For example a policy insuring  a subject matter from a Mumbai to Karachi from the 1.4.04 to 31.3.05. These policies are the governed by the combined  application of the rules relating  to both time and voyage  policies. These policies are also  known as “ Time and voyage policies and are issued for ship and steamers operating over particular routes or sailing between certain fixed ports. 

  (4) VALUED POLICY:  When the value of the subject matter is a declared  at the very outset in the policy itself  at the time of a taking insurance, it is called valued policy. Such declared  insured  value consists of (a) cost of goods: (b) Freight and shipping charges etc., and ( C ) a margin of anticipated profits. In the absence of fraud  or misrepresentation  the valued policy is the measure of indemnity. In case of total loss of the goods, the insurer is required to pay the declared amount to the insured. However in case of partial losses, the liability of the insurer is determined  on the basic of the assessment made by the officials. It should be noted  that the insured value is not necessarily the actual value for the of the cargoes, which may be even less than the invoice price of the goods. For example the actual value of the goods insured may be Rs. 25,000, while the policy may be taken only for Rs. 15, 000. In this case, the insured value is a 15,000 which will be taken will be inserted in the policy itself and will be taken as the  basis of indemnity in case of loss or damage.

 (5) UNVALUED POLICY: When the value of the subject matter is not expressly declared at the time of taking insurance and is left to be a decided at the time of loss, it is called Unvalued policy and the value to be decided later is known as “Insurable value” which consists  of the market value of the goods at the time of a loss and freight and shipping charges only and not of margin for anticipated profits. The Unvalued policies are not popular  or common  in the marine insurances because of difficulties  faced in evaluation of loss at the time of damage. 

(6) FLOATING POLICY: A Floating policy is one of which is taken for a sufficient round sum to cover several shipments: the name of the ship and other particulars about shipments  made under it being  declared as and when they are made till the total sum insured or opened  is exhausted. This policy is also  known as ‘Declaration policy or Open policy”. This policy has made the present day voluminous commercial transactions possible and is particularity  convenient for merchants who are interested  in a series of regular shipments of goods between certain ports or within  defined geographical  areas. All this shipments of cargo-owners are automatically insured against marine perils  immediately after their shipment whether known to be the insured or not. However it is necessary that the declarations  has been top declared to is should be duly made after each shipments with in a reasonable time. The premium should be is calculated according to the amount of risks as a determined from the declarations made. It is not open to the insured to omit to send it in the declarations for shipments which have safely arrived. If he fails to do so. It amount to a breach of trust and renders the policy void.