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Module Units
- 1. Introduction
- 2. Why Is Life Insurance Necessary?
- 3. Who Needs Life Insurance?
- 4. Definition Of Risk
- 5. Classification Of Risk
- 6. Insurable Risk
- 7. Features Of Life Insurance Contracts
- 8. Life Insurance –Required Cover
- 9. What Should Be The Duration Of Your Policy?
- 10. How Much Cover Is Needed?
- 11. Life Insurance Plans & Riders
- 12. Term Plan
- 13. Whole Life Insurance
- 14. Endowment Life Insurance
- 15. Money Back Policy
- 16. Children’s Policy
- 17. Pension And Annuities
- 18. Need For Pension And Annuities
- 19. Unit-Linked Insurance Plans (ULIPs)
- 20. Types Of Unit-Linked Insurance Plans (ULIPs)
- 21. Charges, Fees And Deductions In ULIP
- 22. How Much Of The Premium Is Used To Purchase Units Of ULIP?
- 23. Pradhan Mantri Jyoti Bima Yojna (PMJJBY)
- 24. What Is A Rider?
- 25. Insurance Regulatory And Development Authority Of India (IRDAI)
- 26. Policyholders Interest Regulations, 2002
- 27. Rules Regarding Policyholders’ Servicing
- 28. Grievance Redressal Mechanism
- 29. Must Know Concept And Terms Part 1
- 30. Must Know Concept And Terms Part 2
- 31. Practical Matters
- 32. Accumulation / Payout Stage
- 33. When Should You Exit A Life Insurance Policy You Don’t Need Anymore?
- 34. When You Should Hold On To The Policy?
- 35. Conclusion
Definition Of Risk
Previously we have come across the term ‘Risk’ several times in this module. But let us understand: What is the actual meaning of risk in context to life insurance?
The word ‘risk’ can be used in several different contexts. In insurance, risk is applied to certain assets that can be insured, such as a human life, a house, a car, etc.
There is no single definition of risk because of the different contexts in which it can be used. Here are some of the of risk:
- Risk is the chance of damage or loss.
- Risk is doubt concerning the outcome of a situation.
- Risk is something or someone considered to be a potential hazard.
In life insurance the word ‘risk’ is used to describe the possibility of an unfavourable event occurring, for example untimely death or an unforeseen disability.
Insurance provides protection from the following risks -
- Illnesses;
- Accidents;
- Unemployment;
- Living too long after retirement; and
- Premature death.
Insurance cannot prevent the occurrence of these risks, but it can definitely reduce their impact when they occur. Life insurance mainly deals with two risks – premature death and living too long. The other risks relating to human life are mostly covered under non-life insurance. However, life insurance companies offer additional benefits or riders along with life insurance plans to cover the following risks – death or disability due to accidents, illness and unemployment.
(Source : IRDAI study material for IC-33 exam)
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