Life and General insurance

Anilkumar k.yDepartment of commerce

sims

SPECIAL FEATURES OF INSURANCE CONTRACT1. Aleatory : if one party to a contract might receive considerably more in value than

he or she gives up under the terms of the agreement, the contract is said to be aleatory.

Insurance contracts are of this type because, depending upon chance or any number of uncertain outcomes, the insured may receive substantially more in claim proceeds than the amount was paid to the insurance company in the form of premiums.

On the other hand the insurer could ultimately receive significantly more amount than the insured party if a claim never filed.

2. Adhesion : In a contract of adhesion, one party draws up the contract and

presents it to the other party on a “take it or leave it “ basis; the receiving party does not have the option of negotiating revising

or deleting any part or provision of the document. Insurance contracts are of this type, because the insurer writes the

contracts and the insured either adheres to it or is denied coverage.

3. Utmost good faithAccording to this principle, both the parties (i.e. insured and insurer) should have

faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance

company, any fraud or misrepresentation of facts can result into cancellation of the contract.

The insured must disclose all the material facts known to him at the time the contract is entered into, if the insured fails to disclose all the material facts relating to the subject matter of insurance, the contract can be avoided by the insurer

4. Executory It is stated in the insurance and agreement that the insurer will only

perform its obligation after certain events takes place ( in other words, losses occur)

5. Unilateral insurance contracts are unilateral ; the insured performs the act of paying the

policy premium, and insurer promises to reimburse the insured for any covered losses that may occur.

It must be noted that once the insured has paid the policy premium, nothing else is required on his or her part; only insurer has responsible any further action .

6. Personal contract:Insurance contracts are usually personal agreements between the insurance

company and the insured, and are not transferable to another person without the insurer’s consent.

7. Warranties and representations A warranty is a statement that is considered guaranteed to be true whereas

representation is a statement that is believed to be true to the best of the other part’s knowledge.

According to the laws of most states and in circumstances the responses that a person gives on an insurance application are considered to be a representations, and not warranties.

8. Misrepresentations and concealmentsA misrepresentation is a statement, whether written or oral, that is false.Whereas concealment, on the other hand, is the failure to disclose information

that one clearly knows about.In order to void a contract, the insurance company must prove that the

applicant misrepresented information and willfully and intentionally concealed information.

9. Conditional Insurance contracts are conditional, when a loss is suffered, certain conditions

must be met before the contract can be legally enforced. For example, the insured must satisfy the condition of submitting to the insurance company sufficient proof of loss or prove that he or she has an insurable interest in the persons insured.

10. Fraud Fraud is a intentional attempt to persuade, deceive or trick someone in an

effort to gain something of value. If an insurance applicant intentionally lies in order to gain something then it is considered as fraud.

If an applicant misrepresentations some information with no intent for gain , then no fraud has occurred.

Insurance laws Insurance laws is the practice of law surrounding insurance, including

insurance policies and claims. It can be broadly broken into three categories :

Regulation of the business of insurance Regulation of the content of insurance policies Regulation of claim handlingInsurance business is governed by a number of acts: The first statute in India to regulate the life insurance business was the

indian life assurance companies act,1912 The insurance act of 1938 was the first legislation governing all forms of

insurance. Life insurance in india was completely nationalizes on jan 19 1956,

through the LIC act All 245 insurance companies operating in the country were merged into 1

entity, the life insurance corporation of india.

The general insurance business act 1972 was enacted to nationalize the about 100 general insurance companies.

Untill 1999, there were no private insurance companies in india . The government then introduced the IRDA act 1999 to allow private companies.

Foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.

In 2015 the limit of FDI in insurance sector has been raised to 49% subject to certain conditions

A minimum capital of 400 crore is required to set up an insurance business.

INFANT MORTALITY RATE- the ratio of infant deaths registered in a given

year to the total number of live births registered in the same year; usually expressed as a rate per 1000 live births.

- it is given by the formula: Number of deaths of children less IMR = than one year of age in a year

×1000 Number of live births in the

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FACTORS AFFECTING RATE OF MORTALITYEndogenous

factors:I. Biological factors Birth weight: Age of the mother: Birth order Birth spacing Multiple births Family size High fertility Maturity of an infant at birth:

Exogenous causesI. Economic factors II. Cultural and social

factors Breast feeding Religion and caste Early marriages Sex of the child Quality of mothering Maternal education Quality of health care Broken families Illegitimacy

III.environmental factors Lack of proper sunshine Lack of Fresh air Bad environmental sanitation

infant deaths are grouped into 2 categories according to the age of death.

The first category consists of those infants who die before they complete 4 weeks of life- the rate based on this period is known as neo-natal mortality rate.

The other category consists of those infants who die between 28 days to 365 days of their life- the rate based on this period is known as post-neo-natal mortality rate.

Factors which affect foetal and neo-natal deaths are primarily endogenous, and factors which affect post-neo-natal deaths are primarily exogenous.

1. Endogenous factors:The endogenous factors are related to foetal (i.e. the

formation of the foetus in the womb) and neo-natal deaths. Mainly caused by biological factors.

I. BIOLOGICAL FACTORS(a) Birth weight: - babies of low birth weight and high birth weight are at special risk. - causes: poor nutrition during pregnancy..(b) Age of the mother: - IMR are greater when the mother is either very

young or relatively older.

(c) Birth order - the highest mortality is found among first born, and

the lowest among those born second. - The risk of infant mortality escalates after the third

birth. - the fate of fifth and later children is always worse than

the fate of the 3rd child.

(d) Birth spacing - repeated pregnancies- malnutrition and anaemia in the

mother- predispose to LBW.. - prematurely weaned- PEM, diarrhoea and dehydration.

(e) Multiple births - Infants born in multiple births face a greater risk of death than do those in single births due to the greater frequency of low birth weight among the former.

(f) Family size - the number of episodes of infectious diarrhea

prevalence of malnutrition, and severe respiratory infections have been found to increase with family size.

- fewer children-better maternal care, a better share of family resources, less morbidity and greatly decreased infant mortality.

(g) High fertility high fertility and high infant mortality go together.

(h) Maturity of an infant at birth:

In united states, it was observed that a low birth weight was the cause of two-thirds of all the neo-natal deaths.

It may concluded from this discussion that the causes of feotal and neo-natal deaths so far considered arise mainly out of genetic factors.

2. Exogenous causes Social , cultural, economic and environmental factors

are also found to affect infant mortality, especially during the post neo natal period.

I. ECONOMIC FACTORS The availability and quality of health care and the

nature of the child’s environment are closely related to socio-economic status.

II. . CULTURAL AND SOCIAL FACTORS (a)Breast feeding: Early weaning and bottle-fed infants living under

poor hygienic conditions are more prone to die than the breast-fed infants living under similar conditions.

(b) Religion and caste The differences are attributed to socio-cultural

patterns of living, involving age-old habits, customs, traditions affecting cleanliness, eating, clothing, child care and almost every detail of daily living.

(c) Early marriages ..teen-age mother- greater risk of neonatal and

post-neonatal mortality.

(d) Sex of the child Statistics show that female infant mortality is higher than the male infant mortality.(e) Quality of mothering(f) Maternal education Women with schooling tend to marry later, delay

child- bearing and are more likely to practice family planning. Educated women generally do not have early pregnancies, are able to space their pregnancies,

(g) Quality of health care Shortage of trained personnel like dais, midwives

and health visitors is another determinant of high mortality in India.

According to estimates only 47% of the deliveries are attended by trained birth attendants.

(f) Broken families

(g) Illegitimacy

III. Environmental factors. Lack of proper sunshine Lack of Fresh air Bad environmental sanitation

THANK YOU FOR LISTENING!

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