Current Affairs and Insurance Awareness: Principles Plus Recent Events
Current Affairs and Insurance Awareness in LIC AAO rewards recent, structured reading. Track national appointments, awards, sports, summits, schemes, RBI policy and insurance-sector developments for roughly the last six to twelve months, then connect them to insurance concepts.
Core rules
- Insurance principles: insurable interest (the insured gains from preservation or loses from damage), utmost good faith (full disclosure), indemnity (restore, not profit), subrogation (insurer steps into the insured's shoes), contribution (sharing among insurers) and proximate cause (nearest effective cause).
- Life insurance is not a contract of indemnity; it pays the sum assured. General insurance is indemnity-based.
- Key terms: premium, sum assured, bonus, surrender value, rider, claim, underwriting and reinsurance.
- LIC: established 1956; headquarters Mumbai; products include term, endowment, money-back and ULIP; IRDAI regulates.
- Current affairs: prefer a monthly compilation and revise institutions, schemes and appointments rather than isolated headlines.
Worked example
A property worth ₹50 lakh is insured with two insurers for ₹30 lakh and ₹20 lakh. If a ₹10 lakh loss occurs, the principle of contribution shares it in proportion to the sums insured: 30:20 = 3:2, so ₹6 lakh and ₹4 lakh. Indemnity prevents the owner from recovering more than the actual loss.
Traps
- Saying life insurance follows indemnity.
- Confusing sum assured with premium.
- Mixing IRDAI with SEBI or RBI.
- Using stale current-affairs data from more than a year ago.
- Forgetting that reinsurance is insurance for insurers.