Insurance provides comprehensive financial protection to you and your loved ones. Also you opt for insurance cover to protect your property and assets. It is important to understand and choose from the different types of insurance policies available in India.
Insurance is a word, hearing which your fear goes away. In other words, insurance companies have made your fear a business. You would also like to feel secure in your life. In such a situation, both you and the insurance companies are benefited through insurance.Any unforeseen situation in life can disturb your family’s happiness.
For such scenarios, there are various types of life, health and general insurance policies available in India. But, have you ever wondered when the insurance started in India and how many types of insurance exist in the country. Let us know the answers to these questions in simple words.
How did it start
The history of insurance in India is very old. It is mentioned in the writings of Manu (Manusmriti), Yajnavalkya (Dharmashastra) and Kautilya (Arthashastra). Ancient Indian history has preserved the earliest traces of insurance in the form of maritime trade loans and carrier contracts.
Insurance in India has evolved over time. The introduction of insurance in the country has been heavily influenced by other countries, especially England.
The first insurance company in India was Oriental Life Insurance. It was established in the year 1818 in Calcutta (present day Kolkata). This company, however, went bankrupt in 1834.
About five years later, in the year 1823, the country got its second insurance company, the Bombay Life Assurance Company. After this, in the year 1829, the Madras Equitable Guarantor Company was started.
In 1914, the Government of India began publishing the returns of insurance companies in India. The Life Insurance Companies of India Act, 1912 was the first statutory measure to regulate the life business.
LIC came in 1956
On January 19, 1956 , an ordinance was issued nationalizing the life insurance sector and the Life Insurance Corporation came into existence in the same year. LIC incorporated 154 Indian, 16 non-Indian insurers as well as 75 provident societies, 245 Indian and foreign insurers.
LIC had a monopoly till the late 90s, when the insurance sector was reopened to the private sector.
How many types of insurance are there
You must not have heard about many types of insurance till now, but let us tell you that there are mainly two types of insurance – first general insurance and second life insurance.
General insurance policies are one of the types of insurance that provide coverage in the form of a sum assured for losses other than death of the policyholder.
Overall, general insurance includes various types of insurance policies such as bike, car, home, health, etc. They provide financial protection against losses due to liabilities.
In general insurance you get health insurance, motor insurance, home insurance, fire insurance, travel insurance.
Life insurance plans provide coverage for unfortunate events like death or disability of the policyholder. Apart from financial security, there are different types of life insurance policies, which allow policyholders to maximize their savings through regular contributions to various equity and debt fund options.
In life insurance itself, you get term life insurance, whole life insurance, endowment plans, unit-linked insurance plans, child plans, pension plans.