Considering the fact that with the boom of commercialization and market economy in the last century, the idea of insurance acquired an important and significant status in business as well as for individuals, one may often mistakenly think insurance to be a brainchild of 20th century economics. Though it may come as a major shock to many, the fact remains that the idea of insurance as a financial guarantee to cover for risks involved in daily life or business is nearly 5 millennia old and some social scientists have even gone as far as to comment that insurance surfaced with the appearance of human societies.

 While in non money economies, that is communities which operate without the notion of finance, market, etc the concept of insurance dates back to even more ancient eras, the earliest instance of insurance can be found in the history of Chinese and Babylonian civilizations where the traders had a practice of transfer and distribution of risk in 3rd and 2nd millennium BC respectively. In fact part of the Babylonian way of practicing also becomes evident from the legendary Hammurabi’s Code of Law stating that a merchant would have to pay the lender of money an extra amount in exchange for his assurance to annul the loan to the merchant in the first place in case of the shipment be stolen or lost in any way.

It was in Rhodes, after a period of nearly a thousand years, that a concept called the general average was introduced and developed. According to general average, each and every merchant going on a trade to the sea was required to pay a premium that was divided proportionally which would be in turn utilized in case of any kind of loss or damage to his shipments. But the concept of insurance in the individual fashion as we know of it today is said to have originated around 600 AD in Greece and Rome. Organized guilds known as benevolent societies were set up that took care of families during periods of illness and even provided money for funeral expenses in case of death of an individual member. Most academicians consider this to be the origin of the modern notion of life or health insurances.

The final stage in the development and modernization of the concept of insurance is said to have taken place in and around 17th century London which had become the cradle for post enlightenment knowledge and rational progressive thinking in terms of trade and business affairs. In fact the tragic accident known as the Great Fire of London that took place in 1666 and resulted in the destruction of 13200 houses in and around London plays an extremely significant role in the birth f the modern insurance procedure. Following this large scale tragedy, a sudden drive for insuring buildings was noticed and a person named Nicholas Barbon opened an office to do so. By 1680, this would turn into “The Fire Office”, London’s first insurance company.

There is hardly any doubt left in the fact that almost all the people on this planet would come up with the same reply if they are asked to name the thing most precious to them, that is life and this is one of the basic aspects of the human nature itself. Thus, one can easily realize why the notion of life insurance is such a popular one among people belonging to every nook and corner of the world. In fact, among all the categories and types of insurance, life insurance is probably the most common and most widely purchased one as a policy.

Often known also as life assurance, it is essentially a kind of a contract between the insured or the policy holder and the insurer according to which the later concurs to forfeit a particular pre decided amount in the event of the insured’s demise or cases like terminal or serious illness. On the other hand, the policy holder is also expected to forfeit a particular amount of money which is known as the premium similar to other kinds of insurances, periodically at regular intervals or maybe in a lump sum straight away. While in the US the general practice involves the payment of a stipulated amount in case of the death of the insured, in certain nations there can be contracts whereby involved expenses along with post funeral expenses are also supposed to be a part of the Policy Premium itself.

As it almost goes without saying that according to the terms and conditions of a life insurance policy, despite the fact that the contract is between the insurer and the individual policy holder, the money after his death goes to another individual or a group of individuals or even an organizations who is to be named as a beneficiary in the policy itself. These kinds of insurance policies many a times permit the choice of paying the beneficiary both in cash in a lump sum as well as go for the option of an annuity. The annuities allow for a flow of expenses and are normally categorized as part of insurance since insurance companies issue them and are synchronized as insurance and need similar type of actuarial and investment management skill as life insurance.

It has been seen that in many countries including UK and the United States, the tax laws are defined in such a way that the amount received from the insurer by the beneficiaries along with the interest on the same amount is excluded from the taxes according to certain circumstances. In fact, many individuals make use of this provision by purchasing life insurances to not only save money but also evade taxes while remaining within the legal premise.  However this particular tax related provision may not only just vary in other parts of the world but may differ even from a policy to policy or may even vary from one insuring agency to another.

A flourishing and successful business is the dream of every businessman. They are constantly striving and thinking to increase their business and gain more and more profit. But what if your business has to face failures or bear losses. Problems don’t come with prior intimation. You definitely do not want any kind of obstacle to your already lucrative business.