"Composite Agent" means an insurance agent who holds a license to act as an insurance agent for a life insurer and a general insurer;

A corporate agent can be a firm, a company under the Companies Act, a banking company,or any other organisation that may be approved by the IRDA.

Assignment means transfer of rights, title and interest to the assignee and is governed by Section 38 of the Insurance Act 1938.  

In the case of absolute assignment the rights are transferred to the assignee and it is not reversible without the consent of the assignee.

In conditional assignment, the rights revert to the policyholder, on certain conditions.  It may happen when the condition is that the title reverts to the policyholder in case the assignee dies first.

A broker can be a firm, a company, a cooperative society, or any other person recognised by the IRDA.The Regulations provide for 3 kinds of brokers.  The ‘direct broker’ is authorised to arrange for the placement of insurance of clients, with insurers in India.  He may deal with both life and general insurance.  The ‘reinsurance broker’ is authorised to place reinsurance business of clients who are insurers, with reinsurers.  The ‘composite broker’ is authorised to handle both direct business as well as reinsurance business.

The factors affecting the risk on the life of an individual are called hazards which may be classified into (i) Physical  (ii) Occupational and (iii) Moral.

Section 113 of Insurance Act 1938, provides for payment of a guaranteed surrender value if all the premiums have been paid for at least three consecutive years.  This should also include the surrender value of any subsisting bonus already attached to the policy.

Section 113 (2) of the Insurance Act 1938 makes provision for payment of paid up value if the premiums are paid for at least three consecutive years.  The paid up value will include all subsisting reversionary bonus, already attached to the policy.  The paid up value will bear the  same proportion to the original sum assured as the total period for which the premium have been paid bears to the maximum period for which the premium were originally payable.

“Proposal form” means an application for purchase of an insurance product which shall be the basis of insurance contract

Additional benefits are given to the basic policy in the form of riders.  The life assured has the option to choose the required rider according to his choice.

for which the amount is payable only if death takes place within the term.

Life Insurance is a long-term contract and a common objection is that the money value will come down over a period of time and there is no hedge against inflation.  The sum assured received after 20-25 years will have a much lower value in terms of purchasing power.  To meet this objection Insurance Companies have introduced Unit linked Plan which offers a choice of different funds such as, secured, balanced, growth, debt, risk etc.  The policyholder has his choice of the fund depending upon the market fluctuations.  A part of the premium is utilised to provide a term assurance cover during the period so that in the event of death, the assured amount is payable.

Economic Principles, Legal Principles and Actuarial Principles 

We are all definite about our death. By taking up insurance policy, we are taking membership of an association in which members are agreeable to share the loss of such an eventuality for any member. So in practice the risk of loss of life or property is shared by many. So the burden on the individual member is shared by all. By paying an amount as premium we are purchasing a guarantee against financial uncertainty.

Nomination is a method for facilitating quick settlement of claim in case of the death of the policyholder.  This provision comes under section 39 of Insurance Act 1938.  Nomination can be made at the time of taking the policy by mentioning the name of the nominee in the proposal form itself.  During the currency of the policy also a nomination may be made.  In the event of death of the policyholder, the policy moneys are paid to the nominee without insisting on any other documents of title, such as succession certificate or will.  The policyholder can change the nomination during the term of the policy.

If the life assured commits suicide within one year from the commencement of risk,  the policy will be void and no claim will be entertained.  However the beneficial interest of a third party acquired for valuable consideration will be protected, if the notice is given to the office at least one month prior to death.

Under Sub Section 10 D of Section 10 of the I.T. Act all claim (including bonus) are exempt from Taxable Income.