Short Essay History of Life Insurance in India (300 Words)

Life Insurance

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of the European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged to them. Bombay Mutual Life Assurance Society heralded the birth of the first Indian life insurance company in the year 1870 and covered Indian lives at normal rates. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, of 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The Insurance Act of 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over the insurance business. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on the 1st of September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reaching all insurable persons in the country, providing them adequate financial cover at a reasonable cost.