The first
contract of life insurance as we know it
today appears to have been issued by a group of London based marine
underwriters on June 18, 1583, on the life of a person named William Gybbons
for a sum assured of 383-6-8, and the
premium charged was 30-13-4 for a term
of one years. As Gybbons died during the currency of the policy on may 29, 1584, the
policy resulted in a claim. The
insurance company disputed the claim on the grounds that the assured had
survived twelve lunar months of 28 days
each and therefore , no claim was
payable . But the Court decreed
that as Gybbons had died within
one calender year. they company had to honour the claim, and the company
paid the sum assured . Many writers,
doubt the authenticity of the informations .
For example, the sum assured in
certain writings is shown as 400, and
some differences in the date of the policy have also been observed. In a
contract of life insurance there are two parties, viz., he insurer and the Insured some books use the expressions
like insurant. insuree etc., instead of
the insured. the insured is generally called the life assured . In a life
insurance contract the life assured undertakes to pay an agreed sum as a
premium to the insurer at stipulated intervals called the ‘ Mode during the
selected term. According to the nature
of the insurer at stipulated intervals called the contract and the type of life
insurance cover purchased by the assured the insurer is required to pay the
contracted sum of the legal heirs or to the nominee of the assured if
death occurs during the currency of the contract or to the assured on the expiry of the selected term if the contract so provides . Normally,
the premium uniform bur according to the
nature of the plan, there could be
variations.
As life insurance contractors
are of a longer durations, they are aptly called ‘Long Terms’
the usage is common in the US Considering the fact that life insurance
is meant as a long term savings for the
protections of the family in December
2005 the IRDA put an end to the practice
of some of the insurer’s issuing linked assurances commonly known ULI policies
for terms than five years. The
method of paying the premium is called
the ‘Mode of Premium Payments’
The
assured is required to pay the premium on the date of the policy anniversary covering the ensuing
one year. In practice to facilitate policy holder in the payment of
premium and also to ensure the retention of the business in their books,
companies offer half yearly quarterly
and monthly payments modes or frequencies. generally an extra amount is
the charged in the cased of non-pay role deduction if the policies is where the premium is paid
on the a monthly basis to cover the extra
cost.
Some Companies offer a grace
period of one month from the due date of the premium. If the premiums is not
paid within this period the insurer, may levy a fine or many also demand proof of continued
state of the goof health to
continue the risk cover. It these
requirements are not complied
with, the policy lapses due to the non-payments
of premium and the insurance
cover ceases, or based on the terms a
proportionate cover a lone may be
available unless the policy is revived subject to the payments of the unpaid premium with interest and
productions of satisfactory evidence of health.