INSURANCE CORRESPONDENCE
Correspondence is the most crucial channel through which official communication occurs between two or more parties in any written or digital form. It may be in the form of letters, memos, e-mail messages, text messages, fax messages, voicemails, notes etc.
Despite his great achievements in the field of science, man still has very little control over factors that can harm him or his possessions. fire, storm, accidents and unforeseen calamities continue to trouble him and make his power of guardianship over property hazardous and uncertain. To guard against these forces and the possibilities of loss, modern man invented the device of 'insurance'.
The Encyclopedia Britannica has described Insurance (Assurance) as
"The practical device by which civilized man protects himself against the contingencies of life."
"Insurance is an agreement or contract between the Insurer (one who undertakes to make good damage done) and the Insured (one who fears loss or damage) by which the former undertakes to indemnify the latter in the event of loss or damage for a consideration (premium)."
Insurance is known as a 'professional risk', for as the insurer undertakes to make good, wholly or partially, the loss of many insured parties, the risk is said to be shared by many persons.
Major Catagories of Insurance
Life Insurance
Life insurance is not a contract of indemnity; the event insured against, namely, death, is a sure event. In other types of events insured against is only a possibility; it may or may not happen. Life insurance is a kind of investment or saving and security for the family. The person who wants to take out the policy decides the amount and the period of the policy.
The rate of premium is based on the age of the subject, the amount of insurance desired, the term and the nature of the policy: since age is an important factor, proof of age has to be submitted to the L.I.C. When the proof is submitted, the words "Age admitted" are entered on the policy document. If the age is not admitted, proof of age will have to be produced later, at the time of repayment, claim, surrender, or assignment of the policy.
A policy taken out at a young age has a lower rate of premium than a policy taken out later since the speed is directly related to the subject's age. Premiums are to be paid according to schedule, i.e., monthly, quarterly or annually. The policy lapses if three consecutive premiums are not paid in spite of reminders; a lapsed policy has no value. The L.I.C. makes efforts to get the policyholders to keep up their policies, and a lapsed policy can be revived by paying a nominal revival charge and the premiums in arrears.
If a policy-holder finds it challenging to continue payment of premiums, the policy can be converted into a paid-up policy for a reduced amount; but the term of the policy cannot be diminished, and the amount will be paid to the policy-holder on the original date of maturity of the policy. The value of the paid-up policy is calculated on the basis of the proportion between the originally insured sum and the premiums paid. The bonus up to the date of the conversion is credited to the paid-up policy. The L. I. C. makes efforts to prevent lapsing of policies and dissuades policy-holders from converting their policy to paid-up.
A policyholder in urgent need of money may wish to surrender the policy. A policy acquires a surrender value only after premiums have been paid for three consecutive years. A policy cannot be surrendered if it has been assigned to a minor, since a minor cannot give valid consent. In order to surrender the policy, the policy-holder has to submit the original Policy, bonus certificates, proof of age if age has not been admitted, and the assignee's consent on the prescribed form, if the policy has been assigned. As the surrender value of a policy is less than the total amount paid by the policyholder, it is a loss to surrender a policy. The LIC makes efforts to dissuade policyholders from surrendering their policy.
Marine Insurance
Marine Insurance is a contract in which the loss incurred to goods in transit, whether on land or ocean, between the warehouse of the origin of goods and the warehouse of their destination, is covered.
Marine Insurance is based on the principle of utmost good faith, as also on the principles of indemnity and insurable interest. It is not undertaken to incur a profit but only to minimise the risk in respect of the goods in transit.
In claiming indemnity for a marine loss, it is necessary that the insuring person should inform the insurer immediately of the loss. The insurer will then send the company's surveyor or a setting agent to survey the loss, and it will then be decided as to whether the loss is total or partial.
Fire insurance
Fire insurance is a contract whereby the insurer agrees to pay a particular amount on the specified goods for a specified period if they are burnt by fire. Here, again, unless there is a loss, the insured gets nothing for having paid the premiums. A fire policy is taken out by the insurance company first inspecting the objects to be covered.
It then quotes a premium. The insured pays the premium. The insurance company will then send a cover note stating that the policy is being prepared. The risk is covered from the date of the cover note.
While a policy is in force, a change in address must be immediately notified, for such a change may call for an upward or downward modification in the rate of premium, depending upon whether the changed place is a good or a bad risk; e.g., a cracker factory beside a mattress store is a bad risk.
To claim indemnity in case of destruction by fire, information has to be immediately given to the insurer so that the property or goods destroyed may be surveyed by the Company's surveyor; and, moreover, the claim has to be submitted within 15 days from the date of the fire with all the proper proofs and documents thereof.
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