LIFE INSURANCE - CIN Lecturer: Mr. S Siband
2120
,CHAPTER 1: INTRODUCTION TO
LIFE INSURANCE
•In any activity of life there is a possibility that an undesired event may occur and as a result
pecuniary ( loss may arise).
•In adventures by sea the ship may fail to make to the port (remember Titanic!) or the cargo
may be damaged or lost
•In the adventure of life itself, the life may fail and death may occur, thus causing suffering
to dependents Death comes to all sooner or later, and it is the only truth in this world.
,INTRODUCTION, CONT’D
•The rest as they say is all illusion So if death is the only truth, then why do we ignore
the implications of the event.
•Life insurance is therefore the most important of all forms of insurance as it’s
significance pales the other forms of not just insurance but also all investment
instruments.
•The theory of insurance, in general terms, may be expressed to mean that the good
fortune of the many compensates for the misfortune of the few.
•The consequences of such misfortunes cannot be in many instances borne by the
individual, and so the insurance company is prepared to shoulder the burden of these
consequences in exchange for an assessed payment for the risk undertaken.
, 1.1 FORMS OF HUMAN
SECURITY
•Humans have always sought security.
•This quest for security was an important motivation force in the earliest formations
of families, clans, tribes and other groups.
•Groups have been the primary source of both emotional and physical security since
the beginning of humankind.
•These groups could help less fortunate members in times of crisis.
•Even today, we still rely on groups for financial stability. The group may be our
employer, the government or an insurance company.
2120
,CHAPTER 1: INTRODUCTION TO
LIFE INSURANCE
•In any activity of life there is a possibility that an undesired event may occur and as a result
pecuniary ( loss may arise).
•In adventures by sea the ship may fail to make to the port (remember Titanic!) or the cargo
may be damaged or lost
•In the adventure of life itself, the life may fail and death may occur, thus causing suffering
to dependents Death comes to all sooner or later, and it is the only truth in this world.
,INTRODUCTION, CONT’D
•The rest as they say is all illusion So if death is the only truth, then why do we ignore
the implications of the event.
•Life insurance is therefore the most important of all forms of insurance as it’s
significance pales the other forms of not just insurance but also all investment
instruments.
•The theory of insurance, in general terms, may be expressed to mean that the good
fortune of the many compensates for the misfortune of the few.
•The consequences of such misfortunes cannot be in many instances borne by the
individual, and so the insurance company is prepared to shoulder the burden of these
consequences in exchange for an assessed payment for the risk undertaken.
, 1.1 FORMS OF HUMAN
SECURITY
•Humans have always sought security.
•This quest for security was an important motivation force in the earliest formations
of families, clans, tribes and other groups.
•Groups have been the primary source of both emotional and physical security since
the beginning of humankind.
•These groups could help less fortunate members in times of crisis.
•Even today, we still rely on groups for financial stability. The group may be our
employer, the government or an insurance company.
