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Life Insurance: A Way of Reducing Risk and Providing Social Security to the Policyholders of Life Insurance Corporation of India (LICI)


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1 Bethuadahari College, Bethuadahari, Nadia, West Bengal, India
     

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Life is full of risks. Being a social animal and risk averse, man always tries to reduce risk. An age-old method of sharing of risk through economic cooperation led to the development of the concept of "insurance". Insurance is a social device that reduces or eliminates risk of loss to life and property. It is a means of protection against monetary loss from any kind of peril. Insurance is just a contract between two parties viz., insurer (known as Insurance Company) and insured/beneficiary (i.e. person /party who undertakes an agreement with an insurer). Insurance is broadly classified into life insurance and non-life insurance. Life insurance covers a specified period of life of a person and it deals with the loss of life of human beings due to natural or unnatural reasons. General insurance covers losses caused by fire, accident and marine adventures. The insurance industry has both economic and social purpose and relevance. It provides social security and promotes individual welfare. It reduces risk and helps to raise productivity in the economy. Life insurance allows individuals to protect themselves and their beneficiaries against the risk of loss of income in the event of death/retirement. As a result, the Life Insurance Corporation (LIC) has offered various schemes/policies/plans in order to provide insurance facilities to the masses at reasonable cost. The LIC has been introducing newer and newer plans year after year. The total business of the corporation has grown tremendously in terms of the number of policies and sum assured. However the LIC provides a lot of benefits under different schemes that give social security to the policyholders. In this backdrop, an attempt has been made (a) to discuss the concept of "Insurance", "Life Insurance" and "Social Security"; (b) to study the historical perspective of "Life Insurance Industry in India"; © to throw light on the importance and benefits of taking a Life Insurance Plan; (d) to give focus on some Policies/Plans offered by the LIC that give social security to the policyholders; (e) to highlight the major Insurance Sector reforms in India in the period of liberalization; and (f) to make concluding remarks.

Keywords

Insurance, Life Insurance, Social Security, Welfare
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  • Life Insurance: A Way of Reducing Risk and Providing Social Security to the Policyholders of Life Insurance Corporation of India (LICI)

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Authors

Swapan Kumar Roy
Bethuadahari College, Bethuadahari, Nadia, West Bengal, India

Abstract


Life is full of risks. Being a social animal and risk averse, man always tries to reduce risk. An age-old method of sharing of risk through economic cooperation led to the development of the concept of "insurance". Insurance is a social device that reduces or eliminates risk of loss to life and property. It is a means of protection against monetary loss from any kind of peril. Insurance is just a contract between two parties viz., insurer (known as Insurance Company) and insured/beneficiary (i.e. person /party who undertakes an agreement with an insurer). Insurance is broadly classified into life insurance and non-life insurance. Life insurance covers a specified period of life of a person and it deals with the loss of life of human beings due to natural or unnatural reasons. General insurance covers losses caused by fire, accident and marine adventures. The insurance industry has both economic and social purpose and relevance. It provides social security and promotes individual welfare. It reduces risk and helps to raise productivity in the economy. Life insurance allows individuals to protect themselves and their beneficiaries against the risk of loss of income in the event of death/retirement. As a result, the Life Insurance Corporation (LIC) has offered various schemes/policies/plans in order to provide insurance facilities to the masses at reasonable cost. The LIC has been introducing newer and newer plans year after year. The total business of the corporation has grown tremendously in terms of the number of policies and sum assured. However the LIC provides a lot of benefits under different schemes that give social security to the policyholders. In this backdrop, an attempt has been made (a) to discuss the concept of "Insurance", "Life Insurance" and "Social Security"; (b) to study the historical perspective of "Life Insurance Industry in India"; © to throw light on the importance and benefits of taking a Life Insurance Plan; (d) to give focus on some Policies/Plans offered by the LIC that give social security to the policyholders; (e) to highlight the major Insurance Sector reforms in India in the period of liberalization; and (f) to make concluding remarks.

Keywords


Insurance, Life Insurance, Social Security, Welfare