Life Insurance

Insurance is a social activity where a group of people with common perception of risk come together and agree to share among themselves the loss of any one of them. Risk is the possibility of damage to life or property by accidents or natural causes. Risk involved may vary from person to person, but the group agrees to cover the monitory losses in return to prior contributions in proportion to the risk involved. Inanimate objects have values which may be assessed rather accurately, but the life of a person cannot be assigned a specific monetary value. Hence, life insurance tries to partially cover the loss of income arising out of the loss of life. In practice, a life insurance company sells policies to interested people, collect their contributions as premia, and pay compensation as claim.

In India, life insurance was a monopoly of the Life Insurance Corporation of India till 1999. Since then, numerous private companies have also entered this field. Sixteen major companies are in this business today and this number is expected to grow in the future. All insurance business in India is controlled and guided by the Insurance Regulatory and Development Authority (IRDA), a statutory body incorporated in 2000.

The purpose of writing this blog is to explain the insurance scenario in India in a personal way and to report new developments as and when they occur in future.