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Studies Project Class 11

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Project on Insurance- Business Studies

Project Class 11
 Vaishakh  December 3, 2021
 CBSE 11th Commerce, Business Studies  Leave a comment

Contents [hide]

1 Introduction to insurance
2 HISTORY
3 CHARACTERISTICS OF INSURANCE
4 IMPORTANCE OF INSURANCE
5 PRINCIPLES OF INSURANCE
6 SOCIAL EFFECTS OF INSURANCE
7 INSURANCE vs ASSURANCE
8 METHODS OF INSURANCE
9 METHODS OF INSURANCE
10 SOME INSURANCE COMPANIES ARE
11 CONCLUSION
12 ACKNOWLEDGEMENT
13 CERTIFICATE

Introduction to insurance

Project on insurance- business studies project class 11

Insurance is mean of protection from financial loss. It is a form

of risk management, primarily used to judge against the risk of
an uncertain loss. An entity that provides insurance to known
as an insurer, insurance company, and Insurance carrier on
the underwriter. A person on an entity who buys insurance is
known as an insured assuring a guarantee and known
relatively small loss in the form of payment to the insurance in
exchange for the insurer’s promise to compensate the insured
in the event of a covered loss. The loss may it mat not be
financial, but it must be reducible to financial forms and
equally involves something in which the insured has an
insurable interest established by ownership, possession, or
preexisting relationship.

HISTORY

Insurance in its current form has its history dating back to18
when an oriental Life insurance company was started by Antila
Bharsar in Kolkata to cater to the needs of the European
Community. The pre-independence era in India saw
discrimination between the lives of foreigners(English) and
Indians with higher premiums being charged for the latter in
1870, Bombay Mutual Life Assurance society became the first
Indian Insurer.

At the dawn of the 20th century, many insurance companies

were founded. In the year 1912, the life insurance companies
Act and the provident fund Act were passed to regulate the
insurance business the life insurance companies Act,1912
made it necessary that the premium rate tables and pre
periodical valuations of companies should be certified by an
actuary. However, the disparity still existed as discrimination
between Indian and foreign companies.

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The oldest existing insurance company in India is the National

Insurance Compan which was founded in 1906 and is still in
business. The government of India issued an ordinance on 19
January 1956 nationalising the life insurance sector and life
insurance corporations came into existence in the same,e year.

The life insurance corporation(LIC) absorbed 154, Indian 16

non-Indian issuers and also 75 provident societies-245 Indian
and foreign insurers in 1970 with the general insurance
Business Act was passed by the Indian parliament, and
consequently, the General insurance business was nationalized
with effect from 1 January 11973,107 insurers were
amalgamated and grouped into four companies, namely
National Insurance co. Limited the New India Insurance.Ltd,
the Oriental Insurance co. ltd.the general insurance
corporation of India was incorporated as a company in 1971
and it commenced business on 1 Jan 1973.

CHARACTERISTICS OF
INSURANCE
The insurance has the following characteristics which are
generally, observed in the case of life, marine, fire and general
insurance.

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SHARING OF RISK
Insurance is a device to share the financial losses which
might fall on an individual or his family on the happening of
a specified event the event may the be the death of the
breadwinnernner to the family in the case of life insurances
,marine-perils in marine insurance, fire in fire insurance ad
other certain events in general insurance, eg, theft in
burglary insurance, etc. This loss arising mom these events
of the insured is shared by all the insured in the form of a
premium.

CO-OPERATIVE DEVICE
The most important feature of every insurance plan is the
cooperation of a large number of persons who, in effect,
agree to share the financial loss arising due to a particular
risk that is insured. Such a group of people may be brought
together voluntarily or through publicity or solicitation of
the agent

VALUE OF RISK
The risk is evaluated before insuring to charge the amount
of share of an individual here in called, consideration or
premium. There are several methods of evaluation of risks if
there is the expectation of more loss, a higher premium may
be charged so, the probability of loss is calculated at the
time of insurance.

PAYMENT AT CONTINGENCY
The payment is made at a certain contingency insured if the
contingency occurs, payment is made since the life
insurance contract is a contract of certainly,because the
contingency, the death is the expiry of the term, will
containly occur, the payment is certain. In other insurances
contracts, the contingency is the fire or the marine perits
etc, may or may not occur.So if the contingency
occurs,payment is made,otherwise no amount is given to
the policy holder.

AMOUNT OF PAYMENT
The amount of payment depends upon the values of
occured due etc particular insured risk provided insurance is
there up to that amount . In life insurance, the purpose is
not to make good the financial loss sufffered.TThe insurance
promises to pay a fixed sum on the happening of an event

LARGE NUMBER OF INSURED PERSONS

To spread the loss immediately, smoothly and a cheaply
large number of people should be insured. The cooperation
of a small number of persons may also be insured but it will
be limited to a smaller area. the cost of insurance for each
member may be higher so it, maybe unmarkable.

INSURANCE IS NOT GAMBLING

The insurance services indirectly increase the productivity of
the community by eliminating womy and increasing
initiative the uncertainty is changed into insurer promises to
pay a definite sum for the damage of death.

INSURANCE IS NOT CHARITY

Charity is given without consideration but insurance is not
possible without premium. It provided secuity and safety t
with an individual and to society although it is a kind of
business because in consideration of premium it guarantees
the payment of loss.It is a profession because it provides
adequate sources at the time of disasters only by changing a
nominal premium for the service

IMPORTANCE OF
INSURANCE

Project on Insurance- Business Studies Project Class 11

PROVIDES SAFETY AND SECURITY TO INDIVIDUAL AND

BUSINESS
Insurance provides financial support and reduces
uncertainties that individuals ad businesses face at every
step of their lifecycle. It provides an ideals risk mitigation
mechanism against events that can potentially cause
financial distress to individuals and businesses for instance,
with medical inflation growing at approximately 15% per
annum even simple medical procedures cost enough to
disturb a family’s well-calculated budget, but a health
insurance would ensure financial security for the family.

GENERATE LONG TERM FINANCIAL RESOURCES

The insurance sector generated funds by way of premiums
from millions of policy provider holders. Due to the long-
term nature of these funds, these are invested in building
long-term infrastructure assets that are significant to nation-
building employment opportunities and are increased by big
investments leading to capital formation in the economy.

PROMOTES ECONOMIC GROWTH

The insurance sector makes a significant impact on the
overall economy by mobilizing domestic savings. Insurance
fees are accumulated capital into production investments
insurance also enables mitigation of losses, financial stability
and promoted trade eg commerce activities this result in
sustainable economic development and growth.

PROVIDES SUPPORT TO FAMILIES DURING MEDICAL

EMERGENCIES
The well-being of the family is important for all eg health of
family members is the biggest concern for most from elderly
parents to newborn children, medication and hospitalization
play, an important role while ensuring well-being of families.
rising medical treatment costs and soaring medicine prices
are enough to drain your savings if not well prepared.
Anyone can fall victim to critical illness(Such as stroke, heart
attack etc).

SPREADS RISK
insurance facilities mean the risk of loss from the insured to
the insurer. The basic principle of insurance is to spread risk
among a large number of people. A large population gets
insurance policies and pays a premium to the insurer
.whenever a loss occurs, it is communicated out of the
corpus of finds collected from the millions of policy holders.

PRINCIPLES OF
INSURANCE

PRINCIPLES OF UTMOST GOOD FAITH

According to the principle, insurance is a contract based on
faith. The insured and insurer must disclose all the material
facts to each other if the isnured hides any material fact
from the insurance company and later on the insurer comes
to know about it, then he can refuse to pay compensation.
Failure to make disclosure of material fact by the insured
makes the contract of insurance voidable at the discretion of
the insurance.

PRINCIPLE OF INSURANCE INTEREST

According to this principle, the insured must have an
insurable interest in the subject matter of the insurance
policy without interest taking an insurance policy is a gamble
and fraudent activity and the law does not permit it. In the
case of life insurance, the insurable interest comes with the
relation of insured with the person taking an insurance
policy.

PRINCIPLE OF INTEGRITY
According to this principle, insurance is not a contract for
making a profit>the purpose of insurance is to bring back
the insured n the same financial position as he was before
the loss.

PRINCIPLE OF CONTRIBUTION
It is corallary of the priciple of identity accordingto this
principle, if a person has taken more than one insurance
policy for trhe same subject matter then all the insurer will
contibution the amount of loss and compensate him for the
actual amount of loss seperately he cannot claim total loss
from each insurer the insurer contributes to the total loss in
proportion to the amount assured by each

PRINCIPLE OF SUBROGATION
According to this principle after paying the compensation,
the insurer steps into the shoes of the insured in ither
words, when the insured is compensated for the loss or
damage, to the property insured by her thing the right of
ownership of such property passes on the insurer.

PRINCIPLE OF CAUSES PROXIMA

According to this principle the causes or reason for the loss
must be related to the subject matter of the insurances
contract. If loss is due to some other cause then the insurer
can silent to pay the compensation.

PRINCIPLES OF MITIGATION OF LOSS

According to this principle, the insured must take care of his
property or subject matter of insurance in the same way as
he would take care without taking the insurance policy. It is
the duty of the insured to make a reasonable effort to make
all available precautions to save the insured property.

SOCIAL EFFECTS OF
INSURANCE

Project on Insurance- Business Studies Project Class 11

Insurance provides people from all walks of life and business a

form of safety net and security. Because it offers protection it
makes people feel safe and secure from loss and illness as
well. Its benefits apply to so many aspects of life that can range
from paying huge medical bills should you become seriously ill
and saving you from loss of income or having to file
bankruptcy. Should a natural disaster happen that wipes your
home or business people who carry the adequate amount of
insurance coverage are not faced with the stress and worries of
how they can recover from the catastrophe event?

The social effects of insurance affect almost every part of our

lives today it virtually controls the simple everyday life of what
people want to do as it is required with most major purchases.
A good example is a married couple who have found their
dream home and are excited because it fits their budget only
to find out when they call to get a homeowner insurance quote
they cannot afford it spp insurance has crushed their dreams.

Insurance can also cause hardships for so many people and

keep them from driving a car because they cannot afford policy
insurance can be costly and insurance companies gamble on
the fact that the mass population will never use it. However, it’s
better to have insurance and not need it than to need it and
not have it should something occur. Today, everyone is
expected to carry insurance coverage is often frowned upon
when they say no. Insurance today is woven into our social
circles of daily living it protects us from loss, and has many
benefits in most cases of our daily liver.

INSURANCE vs
ASSURANCE
Generally, the terms insurance and assurance are considered
the same thing but these two are not synonymous. These two
are different in meaning assurance refers to a contract in
which the sum assured is bound to be paid sooner or later in
case of loss insurance the sum.

BASIS FOR
COMPARISON INSURANCE ASSURANCE

It refers to an It is a provision for

arrangement, which coverage of An event,
provides cover for whose happening is
Meaning an event that can certain, such as the
happen but not death principle of
necessarily, like a certainty. A definite
flood, etc event

Principle of
Based on Principle of certainty
indemnity

Protect An anticipated
A definite event
against event

Type General Insurance Life insurance

Only for one year,

Long term, Running
Duration renewable after a
no of years
year

METHODS OF
INSURANCE

According to the study of books of the chartered insurance

institute, there are variant methods of insurance, two of which
are

RE-INSURANCE
h is an insurance that is purchased by an insurance
company in the classic case, reinsurance allows insurance
companies to remain solvent after major claims events, risk
of major disasters like hurricanes and wildfires.

DOUBLE INSURANCE
The situation in which some risk to insured by two
overlapping but independent insurance policies.it is lawful
to obtain double insurance,and the insured can make claim
to both insures in the event of a loss.

METHODS OF
INSURANCE
LIFE INSURANCE
It is diffferent from other insurance in the sense that, here
the subject matter of insurance to the life of human being.

PROPERTY INSURANCE
Under the property insecure if persons are involved aginst a
certain specified risk. The risk may be fine, money theft, etc.

MARINE INSURANCE
It protected against the loss of marine perils. the marine
perils are a collision with a rock, on the ship, captured perils.

LIABILITY INSURANCE
The general insurance also includes liability insurance
whereby the insureds are liable to pay the property damage.

FIRE INSURANCE
Fire insurance comes with the risk of the fire in the absence
of fire is insurance, the first work well increase not only for
the individual but the society as well.

SOME INSURANCE
COMPANIES ARE

Project on Insurance- Business Studies Project Class 11

KOTAK Life Insurance

National insurance company

American Management Cooperation(AMP)

SBI Life insurance company

TATA AIG Travel Insurance

ICICI Pre Life Insurance

Apollo Munich Health Insurance

Metlife Auto Insurance

AVIVA Life Insurance

Birla Sun Life Insurance

CONCLUSION
Insurance is a superior tool to other forms of savings as it
provides protection, collective hearing of risk, assessment of
risks, certainty factor, easy liquidity and above all the safest
means of saving and investment.

There are various insurance products

Your needs will change according to your life stage

Build and reconfigure your insurance portfolio

Review your plan regularly

ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my
teacher of this subject who gave me the golden opportunity to
make this wonderful project on INSURANCE which helped me
in doing a lot of research and to learn many new things. I am
thankful to them. Sadly I would also like to thank my parents
who also helped me in preparing this project within the limited
time frame.

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BHABYA SINGH XI-B

CERTIFICATE
This is to certify that xx of class XI-B has completed her project
on insurance under my supervision. She has taken proper care
and sincerity in this business studies project class 11. I certify
that this project is up to my expectation and as per the CBSE
guidelines

TEACHER’S SIGNATURE PRINCIPAL

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