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Unit 8: Insurance Planning

amount and the insurable value is ascertained in the case of loss. Here the insurer is liable Notes
to pay only upto actual loss incurred to the policy amount. It is also known as Open Policy.
6. Floating Policy: A floating policy describes the insurance in general terms, leaving the
names of the ship or ships to be defined by subsequent declaration. Such policy has the
advantage of being a valid marine policy, in all respects fully complying with the
requirements of the Marine Insurance Act. The declaration may be made by endorsement
on the policy or in any other customary manner. Unless the policy otherwise provides,
declaration must be made in the order of shipment. It must comprise all the consignments
within the terms of the policy and values must be honestly stated. Errors and omissions
however, may be rectified even after a loss has occurred, if made in good faith.
When the total amount declared exhausts the amount for which the policy was originally
issued, it is said to be “run off” or “full declared”. The assured may then arrange for a new
policy to be issued to succeed the one about to lapse, otherwise the cover terminates when
the policy is fully declared.
7. Wagering Policy/PPI Policy: This policy is issued without there being any insurable
interest, or a policy bearing evidence that the insured is willing to dispense with any
proof of interest. If a policy contains such words as “Policy Proof of Interest”, (PPI) or
“Interest or No Interest” it is Wagering or Honour Policy. Under Section 4 of the Marine
Insurance Act, such policies are void in law but such policies continue to be common.
8. Construction or Builders Risk Policy: This is designed to cover the risks incidental to the
building of a vessel, usually giving cover from the time of laying the keel until completion
of trails and handing over to owners. In the case of a very large vessel, the period may
extend over several years.
9. Blanket/open Cover Policy: In order to arrange their marine insurance in advance and to
be assured to cover at all times, and also to avoid the effects of possible rapidly fluctuating
rates, it is the practice of regular importers and exporters to avail “Blanket Insurance”.
One good way, and the most popular one of achieving this is by means of “Open Cover”.
An open cover is an agreement between the assured and his underwriters under which the
former agrees to declare, and the latter to accept, all shipments coming within the scope of
the open cover during some stipulated period of time.
10. Port Risk Policies: This is to cover a ship or cargo during a period in port against the risks
peculiar to a port as distinguished from voyage risks. This kind of policy is probably very
rarely used nowadays.

8.7.6 Medical and Health Insurance

Medical and Health Insurance (MHI), is an insurance policy which is designed to cover the cost
of private medical treatment, which can be very expensive, especially with hospitalisation and
surgery. MHI also ensures that you won’t have to worry about the cost of seeking treatment
during emergencies. In addition, MHI also provides you with an income stream while you
undergo treatment.
In mid 80’s most of the hospitals in India were government owned and treatment was free of
cost. With the advent of Private Medical Care the need for Health Insurance was felt and various
Insurance Companies (New India Assurance, National Insurance Company, Oriental Insurance
& United Insurance Company) introduced Mediclaim Insurance as a product. According to
recent news report health insurance continues to be the fastest growing segment with annual
growth rate of 25%. Health Premium has risen to ` 8100 crores in 2009-2010. As per the recent
reports from various agencies the health sector has the potential to become a ` 30000-crore

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