Discuss the importance of life insurance.

1. Protection against premature-death : Life insurance provides protection to the dependents of the assured in case of his untimely death. The dependents or family members get a large sum in case of the death of their breadwinner. They are saved from economic hardships to a great extent.

2. Protection for old age : Through life insurance, a person can make provision for his old age. After retirement the earning capacity of a person is substantially reduced. He cannot maintain his standard of living without substantial savings. Life insurance enables a person to enjoy peace of mind and a sense of security.

3. Funds for investment : Life insurance corporation mobilises the public savings and channelises them in productive investment for the economic development of the country. Life insurance combines both protection and investment.

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(V Imp)
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How are modern instruments of communication superior than the postal system of communication ?

Modern instruments of communication like internet, fax, extranet etc. are much faster and more secure than the postal system of communication. These instruments are more economical and there is no special need for special preparation for using these instruments. In this respect modern instruments of communication are superior than the postal system of communication.
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 Who have insurable interest in case of a life policy ?


Following have the insurable interest in case of a life policy :

(i) A person has an unlimited insurable interest in his own life.

(ii) A husband has an insurable interest in the life of his wife and a wife in the life of her husband.

(iii) A creditor has an insurable interest in the life of the debtor, to the extent of the debt.

(iv) A servant employed for a specific period has insurable interest in the life of his employer.

(v) A surety has an insurable interest in the life of his co-surety and principal debtor.

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(Imp)
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Who have insurable interest in case of marine insurance policy ?

Under marine insurance, the following persons are deemed to have the insurable interest:

1. The owner of the ship,

2. The owner of the cargo.

3. A creditor who has advanced money on the security of the ship or cargo.

4. The master and crew of the ship.

5. A trustee holding any property in trust has insurable interest in respect of their wages.

6. In case of advance freight the person advancing the freight.

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(Imp)
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Why is insurance a necessity rather than a choice for a business ?

Insurance is necessity rather than a choice for a business because life is full of uncertainties. Both life and property are exposed to risk or accidents. Death or serious injury causes by train or air accident or shipwreck, loss of goods and property in transit are common uncertainties. Everyone is exposed to one type of risk or the other. But is it impossible to say in advance as to one whose shoulder the heavy burden of such a loss is going to fall. It means that no one can be certain of smooth sailing in private life or business. Insurance does not end all these uncertainties but it minimizes the impact of such uncertainties so that there is a need of insurance.
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