In India insurance is a flourishing industry, with several national and international players competing to excel. With several reforms and policy regulations, the Indian insurance sector has witnessed tremendous growth in the recent past. Insurance can be defined as a “legal contract between two parties whereby one party called insurer undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain.” The other party called insured pays in exchange a fixed sum known as premium. Insurance is desired to safeguard oneself and one’s family against possible losses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events.
Life insurance provides financial security to the family of a policyholder in the event of his/her death. This is the most popular insurance policy, as most people want to ensure that their family members remain financially secure in the event of their death. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. At present there are 22 life insurance companies at present offering different products to suit to the needs of the customers. Life Insurance contracts not only allows an individual to have a risk cover against any unfortunate event of the future but also provides for educational needs, retirement needs, loans, tax planning, investment option and savings. The customers prefer to invest their money in a number of alternatives such as post office savings, fixed deposits, mutual funds, share market, insurance, bonds etc. Also, the returns they expect and their frequency of investment varies. The
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