1. Life insurance
Life insurance is a contract between an insurance policy holder and an insurer,
where the insurer promises to pay a designated beneficiary a sum of money (the
"benefits") upon the death of the insured person. Depending on the contract, other
events such as terminal illness or critical illness may also trigger payment. The policy
holder typically pays a premium, either regularly or as a lump sum. Other expenses
(such as funeral expenses) are also sometimes included in the benefits.
The advantage for the policy owner is "peace of mind", in knowing that the death of
the insured person will not result in financial hardship for loved ones and lenders.
It is possible for life insurance policy payouts to be made in order to help supplement
retirement benefits; however, it should be carefully considered throughout the design
and funding of the policy itself.
Life policies are legal contracts and the terms of the contract describe the limitations
of the insured events. Specific exclusions are often written into the contract to limit
the liability of the insurer; common examples are claims relating to suicide, fraud,
war, riot and civil commotion.
How Insurance Works
While it may seem complex, insurance is really quite simple: The payments (or
premiums) of the many pay for the losses of a few. Your premiums go into a large
pool, if you will, at your insurance company. The claims of the few are paid from that
pool. Because there are more people contributing to the pool than there are making
claims, there is always enough to pay the claims – even large single claims like
when someone is permanently disabled as a result of a car collision, or many smaller
claims like those resulting from a natural disaster. (The 1998 ice storm that hit parts
of Ontario, Quebec and New Brunswick resulted in an estimated 700,000 claims for
damage totalling $1.4 billion.)

2. Classification of Life Insurance
Insurance business can be dividend into two broad categories, life and non-life life insurance
is concerned with making provision for a specific event happing to the individual , such as
death whereas non life (or general insurance ) is more commonly concerned with the
provision for a specific event which affect a properly , such as fire ,flood ,theft etc. In this
course we will only cover life insurance . So , let us now move on to definition on life
insurance.
Definition of Life Insurance
According to the U.S Life Office Management Association Inc. (LOMA), life insurance is
define as follow : Life insurance provide a sum of money if the person who is insured dies
whilst the policy is in effect” .

3. NEED FOR LIFE INSURANCE
Risk and uncertain are part of life great adventure – accident , illness, theft , nature disaster-
they all built into the working of the Universe, waiting to happen . Insurance then is mans
answer to the vagaries of life . If you cannot beat man-made and nature calamities , well at
least be prepare for them and their aftermath .Insurance is a contract between two parties
the insurer and the insured wherein the insurer agrees to pay the insured for financial losses
arising out of any unforeseen event in return for a regular payment of “premium” . These
unforeseen event are defined as “Risk” and that is why insurance is called a risk cover .
Hence , insurance is essentially the means to finically compensate for losses that life throws
at people – corporate and otherwise . The principle of insurance works on the concept of a
large number of people exposed to a similar risk making a contribution to a common fund .
Those who suffer losses due to the occurrence of these event are compensated for them
this fund.

4. TYPE OF LIFE INSURANCE
 Wealth creation plans insurance
 Education insurance plan
 Premium guarantee plans
 Protection plans
Wealth creation plans
As an individual who doesn’t desire the best from life?
You would undoubtedly want to plan your finances such
that you can achieve all your goals - a car, a beautiful
home and of course, the comfort and contentment of
your family. All of these goals are long term in nature.
Wealth insurance plans have been designed to ensure
that you can save for these long term goals along with
the benefit of life cover and provide protection to your
family.
Education insurance plans
As a loving and caring parent, you have big dreams for
your child and you want to make those dreams come
true. To bring your dreams to life, you need an
investment that is designed to provide adequate money
for key educational milestones in your child's life, no
matter what happens. With this objective in mind ICICI
Prudential now presents ICICI Pru Smart Kid Regular
Premium Plan. This is a participating endowment
regular premium life insurance plan, with two options to
receive guaranteed educational benefits, no matter what
the uncertainties in your life.
ICICI Pru Smart Kid – Regular Premium plan comes
with a unique Payer Waiver Benefit (PWB). This benefit
ensures that in case of death of the parent, the company
pays all future premiums on behalf of the parent. This
means that the child gets money at important stages of
his/her student life and education never suffers due to
lack of funds.

5. Protection plan
The sole objective of these plans as their name indicates
,is to serve the protection needs of the customer and by
doing so , safeguard one family from the financial
implication of unfortunate circumstance than one cannot
forces.
Premium Guarantee plan
The latest addition to the life insurance product portfolio of ICICI Prudential is the
Premium Guarantee plan – Invest Shield Life New. Premium Guarantee plans are
the ideal insurance-cum-investment option for customers who want to enjoy the
potentially higher returns(over the long term) of a market linked instrument, but
without taking any market risk.
Under the Premium Guarantee Plans platform, ICICI Prudential brings to you the
following products:
Plan Name Plan Type
Invest Shield Life New Unit Linked
Invest Shield Cashbook Unit Linked

6. THE INSURANCE REGULATORY AND DEVELOPMENT
Insurance Regulatory and Development Authority (IRDA) is an autonomous apex
statutory body which regulates and develops the insurance industry in India. It was
constituted by a Parliament of India act called Insurance Regulatory and
Development Authority Act, 1999 and duly passed by the Government of India.
The agency operates its headquarters at Hyderabad, Andhra Pradesh where it
shifted from Delhi in 2001.
The IRDA Act, 1999 was passed as per the major recommendation of the Amphora
Committee report (1994) which recommended establishment of an independent
regulatory authority for insurance sector in India. Later, It was incorporated as a
statutory body in April, 2000. The IRDA Act, 1999 also allows private players to enter
the insurance sector in India besides a maximum foreign equity of 26 per cent in a
private insurance company having operations in India. It serves as an Authority to
protect the interests of holders of insurance policies, to regulate, promote and ensure
orderly growth of the insurance industry and for matters connected therewith.
WHY PRIVATE INSURANCE
 All the private companies have a lock in period of 3 yrs hence no
disinvestments possible.
 Minimum net worth of 500 Cr required for acquired license with a minimum
paid up capital of 100 Cr their insurance venture.
 Commitment to increase the paid up capital manifold in next five years.
 Re insurance for all its policies worth more than 5lakhs. Reinsurance partners,
best and the worth –general cologne and Swiss reinsurance.
 Audit of account by at least 2independent approved auditor each years.