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History of Life Insurance in India

Life Insurance sector deals with the risks and the accidents affecting the life of the customer. Alongside, this insurance policy also offers tax planning and investment returns.

There are various types of life Insurance Policies in India :
a.) Endowment Policy
b.) Whole Life Policy
c.) Term Life Policy
d.) Money-back Policy
e.) Joint Life Policy
f.) Group Insurance Policy
g.) Loan Cover Term Assurance Policy
h.) Pension Plan or Annuities
i.) Unit Linked Insurance Plan

Important timelines in the Indian life insurance :

* 1818: establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818. This company failed in 1834.
* 1829: the Madras Equitable begun transacting life insurance business in the Madras Presidency.
* 1870: enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency.
This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.
* 1912: The Indian Life Assurance Companies Act, the first statutory measure to regulate life business was enacted.
* 1914: the Government of India started publishing returns of Insurance Companies in India.
* 1928: Indian Insurance Companies Act was enacted. This act enabled the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies.
* 1938: Insurance Act, 1938 amended previous act and consolidated it with comprehensive provisions for effective control over the activities of insurers.
* 1950: The Insurance Amendment Act abolished Principal Agencies. However, due to fierce competition and allegations of unfair trade practices, The Government of India, decided to nationalize insurance business.
* 1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India.

Last updated on: 02/10/2019


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