Monday 17 November 2014
What is Life
Insurance?
Our
daily life has many events when results are not according to our desires which
led to depression and feeling of further possible financial losses. For example,
Titanic could not reach their destination or cargo may be damaged or lost.
Meanwhile, Life is uncertain and it is the only truth in the world which has
been accepted by all over the world. Life insurance is most important form of
insurance. Consequences of misfortunes cannot be avail by individuals, so the
insurance company ready to shoulder the weight of the possible results for an
assessed payment. No one knows about happening of possible misfortune.
Insurance company has concern with
every factor that effect normal circumstances. Once the contract has been made
and regular premiums start to be paid by the policyholder and contract cannot
be broken.
Increasing prominence is on
investment features has modern trend due to increasing trend of future planning
rather primary protection against early death.
Statements relating
Life Insurance:
Life insurance
has no competition from other financial products:
- Other financial instruments may include interest income received from bank, share market or any other mutual fund. It also relates with security of economic value of asset. This kind of mechanism is used to reduce the loss of the asset.
- Compensation in case of death or accident.
- In case of death of policyholder, only Life insurance gives surety for compensation rather any other financial product which is paid to the nominee.
- Surely, there is some competition with other financial services but it is the only service which provides risk coverage/protection of economic value of asset.
Life insurance helps to maintain standard of living of dependents in case of unfortunate death permanent disability of life assured:
Friends: One question can resolve
this statement in easy way. Suppose, you are sitting in the chair in your
office’s 3rd floor while reading magazine and you fell down. Where
do you land? Of course , on your floor. But in case of no floor, where do you
fall? On ground.
The floor is
your 2nd level support.
Chair is 1st
Level of support
Floor is 2nd
Level of support
Ground is Base
level support
A unique level of feature about Life
insurance is immediate monetary state maintained. It surely decreases the
mental disturbance of people about worry, tension, doubt and psychological
diseases. Free from tension people may create more wealth for their self and
for the nation also.
Many years ago,
this message was outlined in a classic print hoarding released by LIC, which
read:
“Insurance-A
little Price-For a Priceless Security”
Your Human Life can be calculated by
three means:
- Age
- Current and future Expenses
- Current and future incomes
Exact amount of investment should be
depends upon people who depend on you. Human Life value may be determined as
the formula given below:
Capitalized value = Net future
earnings – cost for self-maintenance
