Page 3 - IC23 life insurance application

new one. But if the vehicle is totally damaged due to an accident, the entire capital is

lost and the owner cannot replace it. It is so with any other asset.

It is the human ingenuity which has found out a way out of this. As a large number of

members of society face this problem - problem which is common to all of them,

problem which is beyond the capacity of any individual to bear, it becomes

necessary for similarly placed individuals to come together and forge a common

strategy to meet this eventuality of loss of a valuable asset.

Insurance as a social security tool :

Individual’s income is dependent upon the investment of his time. Over a period of

time, he saves sufficiently to provide for the time, when he is too old to earn. But no

body can guarantee him this time. This uncertainty of time leads him to the invention

of insurance. The story goes of a newspaper hawker boy who used to go on cycle to

distribute newspapers to earn his livelihood.

One day, when he left his cycle outside a house and went in to deliver the

newspaper, his cycle got stolen. He had thereafter no means to run around. Walking

would be a slow process and his income would dwindle. The boy was a smart one.

He called his other brother hawkers and narrated his story. Many others in the same

job had similar stories to tell. They just hit upon an idea. A cycle say would cost Rs.

100/-. There were almost 100 hawkers.

Almost every year one cycle was getting stolen. Only if they could have a fund of

Rs.100/-such a loss suffered by any of them could be compensated. And the

creation of a fund of Rs.100/- merely means a contribution of Rs.1/- per person per

year. The concept of insurance was born. A co-operative society was created, where

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